US Steel Corp Initiates Competitive Bidding War Amidst Slump in Hot Rolled Coil Prices
US Steel Corp Initiates Competitive Bidding War Amidst Slump in Hot Rolled Coil Prices

US Steel Corp Initiates Competitive Bidding War Amidst Slump in Hot Rolled Coil Prices

  • 18-Aug-2023 12:41 PM
  • Journalist: Motoki Sasaki

Hot Rolled Coil shows a damping price trend in the US market in mid-August as the demand slows down and the increase of consumer price Index in the USA adversely affects the market. The production rate is firm, whereas the demand gets lowered, leading to a higher inventory level of Hot Rolled Coil in the US spot market. The ongoing bidding process for the US Steel Corporation has kept the market players in a wait-and-watch situation as to which direction will the Hot Rolled Coil production market go in the USA.

The Hot Rolled Coil inventory has remained on a higher edge in the US steel market as the local steel mills were manufacturing at a standard rate amid demand from the downstream automotive industries plunged in the third week of August. As a major consumer of Hot Rolled Coil, the downstream automotive industries showed less interest in placing orders leading to limited transactions and low offer rates. The United Auto Workers (UAW) have announced that they would go on strike against the three major Detroit auto market leaders such as Ford, General Motors, and Stellantis are still taking the contract talks in a lighter way concerning higher wages and other economic concerns. The contract deal between the UAW and the big three will be completed on 14th September this year, which provokes the worker committee members and leaders to go on strike to attract their attention. The automotive giants strongly criticize the demand as they are not economically feasible according to current market and economic conditions. This has lowered the demand and consumption of Hot Rolled Coil in the downstream automobile market.

Furthermore, the major Hot Rolled Coil manufacturer United States Steel Corp., has been in a bidding process in the US market after bearing consecutive losses for several quarters, declining revenue, and downward pressure from high raw material and energy costs. Cleaveland Cliffs, the major rival of US Steel Corp, had proposed the offer to take over the company, but the US Steel Corp and United Steelworks (USW) have declined the offer and are looking for alternative options. The further deal from Esmark, the key market player in Hot Rolled Coil production in the USA, offering USD 7.3 billion in cash for acquiring the plant, was also rejected just after the offer from Cliff’s was declined. However, now the market players expect Arcelor Mittal to place an offer as it would reduce their chances of retreating from the US market. The major global Hot Rolled Coil manufacturer, Arcelor Mittal, has already sold most of their mills to Cleaveland Cliffs for USD 1.4 billion in previous years. Arcelor Mittal is looking forward to shifting their operational works toward rising global markets such as India for operations and manufacturing and Brazil for a better supply of raw materials. This would uplift the market sentiment to produce Hot Rolled Coil in the US-based steel sector. The inflation rate was on a higher edge till July end, which increased the consumer price index to 3.2%, as the US Labor Department reported.

According to ChemAnalyst, the price of Hot Rolled Coil is expected to boost in the last quarter after enduring a slowdown since the start of the year. The major Hot Rolled Coil manufacturers such as Cleaveland Cliffs, US Steel, and Arcelor Mittal have anticipated an uplifting market competition in Q4 as the market and US economic condition recover. If The US Steel Corp’s deal gets signed by Arcelor Mittal, the Hot Rolled Coil is anticipated to boost, providing an improved market in the US spot market.

Related News

European Hot Rolled Coil Price Faces Challenges as The Demand Lowers Amidst Market Uncertainties
  • 28-Feb-2024 12:20 PM
  • Journalist: Li Hua
Italian Hot Rolled Coil Price Observed Rising Trend Amidst Strong Demand from Construction Industries
  • 12-Jan-2024 2:17 PM
  • Journalist: Li Hua
European Hot Rolled Coil Price Increases Amidst Low Supply Rate and Mills Pushing Price
  • 15-Dec-2023 2:58 PM
  • Journalist: Patrick Knight
US Hot Rolled Coil Faces Price Rise in the Second Half of October Amidst Tight Supply
  • 27-Oct-2023 4:27 PM
  • Journalist: Jacob Kutchner