Cold Rolled Coil Prices Trend and Forecast
North America
Prices for US Cold Rolled Coil
dwindled in the fourth quarter of 2022 due to a lack of price direction and
major logistics concerns. In the fourth quarter, the steel market awaited the
outcome of contract negotiations between integrated steelmaker US Steel and
USW, which expired on September 1st, 2022. However, the US government
intervened to prevent a national freight rail strike by forcing union members
to accept a deal and raise employee wages. Additionally, the Mississippi
River's water level dropped in the final quarter, resulting in costly dredging,
traffic congestion, and shipping delays. Furthermore, shippers were forced to
limit the cargo volume their barges could transport to navigate the low water
levels safely. High-priced raw materials had higher conversion costs in mid-Q4,
with expensive pig iron inventories and higher-priced scrap inventories being
the primary drivers of CRC mixed sentiment. As the holiday season approached in
December, market participants reported little trading activity in the spot
market. The market slowed as mills continued to raise prices in preparation for
the Christmas holiday. According to market participants, CRC prices have risen
due to trade concerns that winter storms will disrupt logistics and steel
production in the United States. As a result, the Ex Midwest (USA) price of CR
Coil (1 mm) was set at USD 1033/MT.
Asia Pacific
In the fourth quarter of 2022,
the Cold
Rolled Coil prices showcased an upswing price trend in the Chinese
market amidst sporadic COVID lockdowns, logistics issues, and a shrinking
demand outlook. In October, the prices of Cold-Rolled Coil plunged in the
backdrop of shrinking demand and limited purchasing activity. Large Chinese
mills resisted lowering their offers in export markets, while spot traders
began to sell short. By November, nickel and steel had begun rallying again.
However, suppliers remained rampant with an inventory. Furthermore, Chinese
scrap prices rose in mid-Q4, but the price gains were offset. Additionally, the
Federal Reserve's interest rate hike continued to hurt the commodity market, so
the market was pessimistic. Suppliers reduced market shipments as winter
restocking expectations fell. In December, Cold Rolled Coil prices appeared
bullish again, making the 2023 Q1 price outlook appear more bullish. Thus, the
Ex Tianjin (China) CR coil (SPCC-1 mm) price was fixed at USD 666/MT.
Europe
Prices for Coil Rolled Coil in
the European market fell in the fourth quarter of 2022 due to low demand,
increased supply chain stocks, and cautious end-user purchasing activity. The
European cold-rolled coil market remained quiet in Q4, according to suppliers,
with some suppliers' discounts failing to stimulate trading activity and fill
gaps in their order books. Despite this, regional trade remained subdued in Q4.
Distributors reported large stocks of downstream coil purchased at higher
prices in the first quarter to avoid restocking in the fourth quarter. To
balance supply and demand, several European producers either stopped producing steel
or reduced output in the third and fourth quarters of 2022. Mills believed that
Cold-Rolled Coil prices had reached a bottom, with no room for further price
drops due to higher production costs. Aside from low demand and overstocking,
competitive overseas offers had pushed CRC prices in southern Europe lower.
While some buyers need to restock, market participants stated that they would
prefer to wait for the price to fall to its lowest point before replenishing
stocks for the first quarter of 2023. Thus, the CR Coil (1 mm) prices for Ex
Ruhr are fixed at USD 854/MT.
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