Overview
Hot Rolled Coil (HRC) steel prices in November rose month-on-month (m-o-m) in the EU and the US, although the price increase appears unsustainable due to weak market demand. The effect of the Chinese government’s stimulus announcement has diminished, resulting in m-o-m declines in Chinese steel and raw material prices.
European and US Steel Markets Did Not Receive Seasonal Demand Growth
In November, the average 3-month futures price of US HRC at the Chicago Metals Exchange (CME) increased by 3% m-o-m to $866/mt. However, prices fell again in the second half of the month due to weak demand. During the same period, the average price of EU HRC increased by 1.4% m-o-m, but market sources reported that the primary reason for the price appreciation was the weakening euro, which improved competitiveness against imports.
There was no seasonal increase in purchases in November, as consumers remain uncertain about future steel consumption and are reluctant to increase buying activity. US steel consumption remains weak, with domestic steel shipments declining by 1% y-o-y in September and 4% y-o-y during the first 9 months of 2024. Eurofer revised down its estimate of apparent steel consumption in Europe and worsened its Q4 forecast to -3.5% y-o-y. Steel consumption in the automotive industry is forecast to fall by 6.5% y-o-y in 2024.
China’s HRC and Iron Ore Markets
Chinese export HRC prices fell by 4% m-o-m in November due to weak demand. Chinese domestic prices also declined. Despite government stimulus in China, steel consumption has not changed significantly. The stimulus announced at the end of September has not yet had any tangible impact on the construction market. Real estate investment in October fell by 12% y-o-y, the fastest decline in the last seven months. Correspondingly, the number of new property builds started in the first ten months of 2024 accelerated to a 23% y-o-y decline, compared with a 22% y-o-y decline for the first nine months. Market expectations remained subdued in November, as sources anticipate the construction output downtrend to persist until at least the end of 2024.
Government stimulus in China is unlikely to lead to significant changes in the finished steel products market in December. Nevertheless, China’s steel market in November saw a decline in steel stocks, which will help better balance the domestic market.
Traditionally, on the eve of the Lunar New Year (which in 2025 starts in January), China intensifies purchases of raw materials. If this occurs, market sources expect it to be reflected in higher prices. Since China’s imported iron ore price is the global benchmark, any increase will translate into higher steel production costs in Europe and the US.
Implications for Hot Rolled Steel Prices
Although demand remains relatively subdued, the rising cost of raw materials continues to support higher steel prices worldwide. This dynamic is central to ongoing Hot Rolled Steel Price News coverage, as traders and manufacturers navigate volatile input costs, evolving geopolitical factors, and shifting production levels. As the market progresses, industry participants will closely monitor these trends and their potential impact on hot rolled steel prices.
Stay tuned for more Hot Rolled Steel Price News and comprehensive market insights.
Written by Nick Wood
