Market participants report strong demand despite economic concerns

US hot-rolled coil (HRC) prices have stabilized at an average of under $900/t after falling through much of the second quarter of 2023. Columnist Michael Cowden writes about it in the column for The Fabricator.

Among the price stabilization factors, market sources cite the return of producers to the market after seasonal shutdowns in early July and an unplanned outage at the Steel Dynamic steel plant in Texas. There is also strong demand, despite worries about the possible impact of higher interest rates and tighter lending standards. In addition, there is an opinion that some plants are not willing to lower offers below $900/t.

In addition, the majority of respondents to The Fabricator’s survey believe that HRC prices in the US market have bottomed out or will reach it before the end of August. Also observed is the number of those who report stable or growing demand for these products. According to the observer, it should be observed whether the latest trend will continue in the future.

Currently, the lead times for orders for HRC by steel mills are approximately 4-5 weeks. However, expectations regarding this indicator on the part of survey participants have changed – they believe that the timing will improve or even stabilize over the next two months.

As GMK Center reported earlier, hot-rolled coil producers in Europe are trying to achieve higher prices on their products at the conclusion of transactions. Despite the fact that the downtrend has stopped, and prices have been stable for several weeks, attempts by metallurgical plants to push them were mostly in vain – the market does not support growth. Sources suggest that in the fourth quarter, factories may begin to cut production and turn off part of their capacities in order to balance the market and stimulate at least visible demand.