For the Quarter Ending December 2022
North America
In the fourth quarter of 2022, Hot Rolled Coil prices in the US market showed a mixed trend due to weakening demand amidst a few positive signs in the market. As steelmakers approached or even met breakeven points, multiple market participants recognized that the Hot Rolled Coil market had reached a bottom in October. High-priced raw materials had higher conversion costs, mainly expensive pig iron inventories and higher-priced scrap inventories. With the Thanksgiving holiday in the United States in November, demand plummeted, and the rest of the year was expected to be slow. However, Hot Rolled Coil prices recovered in December. According to suppliers, HRC spot prices fell in mid-December as the market remained quiet due to the Christmas holiday. On the other hand, steel mills had maintained higher prices and were refusing to lower them. Domestic Hot Rolled Coil manufacturers in the US market appeared optimistic about the new year, but spot pricing remained lower than during the previous summer and fall seasons. Thus, the HR Coil (3 mm) prices for Ex-US Midwest (USA) were fixed at USD 784/MT during the last week of Q4.
Asia Pacific
In the Chinese market, the Hot Rolled Coil prices showcased a stagnancy in their price trend in the fourth quarter of 2022 due to weakened buyers' purchasing activities amidst the relaxation measures on the zero-Covid policy. HRC production increased in October, while consumption increased slowly due to sporadic Covid lockdowns and logistics issues. Buyers were opting for lower prices, while manufacturers claimed the prices had touched the bottom line. In November, the Hot-Rolled Coil prices increased as the traditional peak demand season was gradually approaching the end. Downstream inquiries for hot rolled coils bottomed out in December, pushing prices in the domestic and export markets to five- and four-month highs. China's major flat steel manufacturers, Boasteel, Anshan Iron & Steel (Angang), and Benxi Iron & Steel (Bengang), raised their flat steel offers for January. The three companies agreed to increase hot rolled coil quotations by USD 28.7/MT in December. As a ripple effect, the HR Coil (Q235-1 mm) prices for FOB Shanghai (China) settled at USD 705/MT during Q4.
Europe
Towards the closure of 2022, the Hot Rolled Coil prices edged downward in the German market, despite discounts offered by major suppliers. HRC manufacturers reduced their offers in October to fill order book gaps. Despite this, regional trading activity remained sluggish because buyers had enough material to hold off on new purchases until the mid-first quarter of 2023. In addition, several European steelmakers halted or reduced output in the third and fourth quarters of 2022 to close the supply-demand gap. Long-term contract negotiations between mills and end users in the automotive industry had progressed at higher prices than had been initially targeted. HRC prices remained mostly stable due to conservative bookings, a pessimistic outlook, and weak market conditions. Thus, during the final week of Q4, discussions on HR Coil (3 mm) prices for the Ex Ruhr were settled at USD 719/MT.
For the Quarter Ending September 2022
North America
During the third quarter of 2022, the Hot-Rolled Coil prices witnessed a downward trend in the US market owing to the lower raw material costs. According to market participants, falling feedstock prices were added to the downward pressure. The ongoing decline in Hot-Rolled Coil (HRC) pricing in the United States (US) continued till September, though more significant buys and mill resistance appear to be influencing the market to establish a floor price. Furthermore, buyers were not restocking HRC in warehouses and stated that they could purchase additional tonnes based on demand. Market participants were divided on whether HRC pricing had reached a bottom, with many pointing to the August scrap trade as a leading indicator. According to manufacturers, most buyers are wary of placing large orders. They were concerned about further price reductions. Thus, the discussions for HR Coil (3 mm) prices for Ex-US Midwest (USA) settled at USD 868/MT.
Asia Pacific
Hot-Rolled Coil prices in the Asian market fell in the third quarter of 2022 due to a declining demand outlook. According to buyers, Indian mills increased their offers in mid-August due to deal closures in the Middle East and Southeast Asia. According to market participants, downstream manufacturers have shown limited interest in Indian Hot Rolled Coil quotations. As a result, Indian manufacturers have been hesitant to cite low figures and solicit customer quotations. Indian mills were hesitant to withdraw offers despite low demand in Europe, Turkey, and Vietnam. Lower exports contribute to inventory build-up, forcing steel manufacturers to adjust production accordingly. The monsoon season added to the country's limited demand for steel. Automobile manufacturers have recently reduced casting orders due to massive inventory due to poor car sales over the last three months. Therefore, the HR Coil (2 mm) prices for Ex Mumbai (India) are fixed at INR 57150/MT.
Europe
Hot-Rolled Coil prices have declined in the European market during the third quarter of 2022 owing to a sluggish demand outlook. According to market participants, despite producers pushing for higher levels, buyers' high inventories and weak demand from end-user sectors remain significant issues. European HRC buyers continued to be cautious, with only small tonnages recently traded in the spot market. Several large stockholders claim they have postponed restocking for several weeks because their inventories have been still relatively high, despite a low order intake from end users. Producers have been attempting to secure price increases due to high costs since the beginning of September, but poor demand has hampered price growth. The quotations were ineffective; buyers refused to pay and could not pass the increase downstream. However, most Italian buyers were uninterested in domestic HRC bookings and preferred imported alternatives. Thus, HR Coil (3 mm) prices for Ex Ruhr (Germany) settled at USD 848/MT.
For the Quarter Ending June 2022
North America
During the Second quarter of 2022, the Hot Rolled Coil prices witnessed a see-saw sentiment. In April, the HR Coil prices showcased an upswing trend owing to a constrained supply chain and raw material shortages amidst the ongoing geopolitical tensions. Limited import offers and higher freight rates further increased HR Coil costs. However, some plants in the Midwest witnessed stock availability in late May, while others moved into June. Additionally, because of their extensive inventories, distributors and service centers purchase smaller volumes. The firms are concerned about additional hikes in scrap and energy costs. They are, therefore, reluctant to concede reductions in selling prices. Thus, several market players opted wait-and-watch outlook amidst the stagnant demand.
Asia Pacific
In the Asian market, the Hot-rolled coil market witnessed an upswing trend in the second quarter of 2022 owing to the robust demand since the sanctions imposed on Russia, coupled with the overall uncertainty. As per market participants, global HR Coil prices remained under pressure from the Russia-Ukraine conflict and its ramifications, particularly on raw materials and logistics. The Indian authority levied a 15% export duty on steel, effective May 22, to rein costs to control inflation. Thus, the Hot Rolled prices declined in June due to the weak demand, piled-up inventories, and poor export offers. The prices of HR Coil fell roughly 8-12 percent since the imposition of export duty on steel and allied products. The HR Coil manufacturers are dropping their offers; however, mills are not receiving solid offers from European consumers.
Europe
In the European market, the Hot Rolled Coil prices declined in Q2 2022 due to the limited inquiries, limited transactions, and export restrictions amidst the reduced supplies because of sanctions on Russia. HR Coil prices fell in Russia due to the muted inquiries amidst the reduced supplies because of the sanctions. Since early April, the European Union banned the imports of Russian coal as part of sanctions due to the ongoing war. Furthermore, the sanctions imposed on Russia, coupled with the falling exchange-rate value of the rouble, weak demand, shrinking exports, surplus production, and overall uncertainty, led Hot-Rolled Coil prices to decline in the second quarter of 2022. HRC prices are approaching the pricing floor in the short term, but Russian natural gas outages and the general inflation rate could influence a rebound in flat steel prices.
For the Quarter Ending March 2022
North America
In North America, the Hot-Rolled Coil prices witnessed an inclining trend owing to the tight supply chain and higher input costs during the first quarter of 2022. In contrast, market participants are boosting the hiring of employees to reduce the backlog of unfinished work. Moreover, bulk clients have already secured their needs until May and are waiting for bidding to start in June shipment cargo. Additionally, severe constraints on the supply side raised significant issues as transportation and delays threatened to disrupt operations. However, Import prices for HRC in South America were primarily up amid higher freight rates.
Asia Pacific
During Q1 of 2022, the HRC market witnessed an upward growth primarily due to inflation in raw materials costs especially coking coal. This soaring in raw materials prices is backed by supply disruption due to extended hostilities between Russia and Ukraine. Amidst it, coal prices have trebled in the quarter and reached USD 600-700/tonne from USD 310/tonne. Applying a strict restriction policy to surge the spread of the pandemic in China and controlling carbon emissions have resulted in sluggish HRC production in China. However, the Indian Steel manufacturers have hiked prices of HRC by USD 18-28 /tonne due to inflation in coking coal costs. Indian Steel market players are highly encouraged regarding HRC export as they have already secured enough stockpiles till May delivery.
Europe
Hot-rolled coil prices in the European market increased in the first quarter of 2022 due to solid demand amidst the conflict between Eastern European nations. The ongoing geopolitical conflict between Russia and Ukraine has caused supply chain disruption of various commodities. Russia primarily produces raw materials such as aluminum, copper, coal, and crude oil. In the midst of it all, sanctions imposed on Russia resulted in a blockage in the production and value chain. As a result, rising cocaine prices and imposed sanctions hampered production and supply chains throughout Eastern European nations. Additionally, European steel market players continued to hold back bookings on European-origin HRC due to competitive import offers and complete credit lines.
