HRC prices face weak demand in mid-March

Hot-rolled coil prices in China increased by $5/t from March 14 to March 21, to $480/t FOB, according to Kallanish. Since the beginning of the month, the increase was $10/t. It was accompanied by a clear improvement in domestic demand and the export situation.

In January-February, Chinese metallurgical plants increased shipments to foreign buyers by 6.7%, to 16.97 million tons. Industrial production in China during this period grew by 5.9%, including in the auto industry – by 12%. This exceeded the preliminary expectations of analysts. In general, growth was recorded in 36 out of 41 manufacturing industries.

Hot-rolled coil prices in India increased by $72.5/t to $567.5/t FOB. In the first half of March, supply was at $495/t FOB. Indian demand for flat metal products was supported by strong performance of the auto industry. New car sales in January increased by 1.6% year-on-year to 3.993 million units, in February – by 1.9% to 3.78 million units.

The rise in rolled products prices was also influenced by the initiative of the Directorate General of Trade Measures to introduce a 12% protective duty on all types of flat rolled products, announced on March 23. The final decision has not yet been made by the Ministry of Finance. Judging by the market reaction, its participants predict support for the initiative.

US hot-rolled coil prices from March 14 to 21 remained unchanged and amount to $975/t EXW. Since the beginning of the month, the product has risen in price by $125/t. The protective duties of 25% on imports of all metal products to the USA, effective since March 4, allowed local producers to raise prices without fear of external competition. But the growth potential has been exhausted at the moment.

At the same time, demand remains quite strong. Metal traders note that the order book for April at metallurgical plants is fully formed, new orders are accepted for delivery in May.

The American auto industry, the main consumer of flat rolled products, is demonstrating unstable dynamics. January growth in new car sales in the USA by 3.8% in annual comparison, to 1.113 million units, in February was replaced by a decline of 2.3%, to 1.222 million units. In general, industrial production in January decreased by 0.1% y/y.

In Southern Europe, hot-rolled coil fell by €5/t to €540/t CIF from 14 to 21 March. In the first half of March, prices remained stable at €545/t CIF. The supply decline is explained by high stocks at consumers. One of the re-rollers told Kallanish that demand is not very high, so the available hot-rolled coils will last him for 5 months of work.

Importers are also influencing the price decline. Offers for supplies from Indonesia and Malaysia are at the level of €530-550/t CFR Italy. The minimum offer from Indonesia was €510/t CFR Italy.

As reported, Indian steel imports could fall by 50% in the 2025/2026 financial year (starts on 1 April) if the government accepts the recommendation to introduce a 12% safeguard duty for 200 days. This will also improve the profitability of local metallurgical companies, according to the credit rating agency ICRA.