Global steel prices for HRC have reached a maximum
The sharp rise in steel prices in China, caused by the government's production cuts, has led to an increase in global prices for hot-rolled coils (HRC).
This coincided with several other supportive factors, such as high commodity prices, trade measures, and regional dynamics in the EU, including a reduction in import supply, although demand remains fundamentally weak in many countries.
The Argus Global HRC Price Index, a composite weighted average index of key regional HRC prices from Argus, was on an upward trajectory this month, increasing by $12.33 per tonne from August 1 to $544.75 per tonne on August 12. According to the index, HRC prices bottomed on July 9, reaching $523.13 per ton.
The increase is mainly due to the fact that HRC prices in China have bottomed out, and the Argus daily fob Tianjin index has bottomed out in this cycle at $439 per tonne on June 25 and is holding steady. at this level until July 2 due to low steel consumption in the summer on the domestic market and weak demand in maritime transport.
The market rallied in early July due to government incentives to eliminate obsolete capacity, and then again in mid-July due to production cuts ahead of the Chinese military parade in September. In the second half of July, the construction of a large dam in Tibet, which is expected to boost demand for steel, further increased prices.
Strengthening prices for iron ore and coking coal also provided support amid talk of limiting production at coal mines in China. Before the latest spike in coking coal prices, the Argus fob Australia solid coking coal price index reached a low on July 8, and since then it has risen by $20.10 per tonne to $153.65 per tonne on August 12. During the same period, Argus ICX® 62pc increased in price by $8.50/ton.
. Rising steel prices in China and rising raw material prices have played a role in increasing global supply, but a reduction in imports to Europe due to a number of trade measures has stimulated rising steel prices in China. the bolder camp increases. Expectations that supplies will be even lower in January due to the entry into force of the Carbon Dioxide Emissions Control Mechanism (CBAM) reinforced sentiment. The European Argus HRC index, which is the average of the ex-works northwest in the EU and ex-works in Italy, rose by 28.25 euros per tonne compared with July 15.
On the contrary, during the summer months, the Argus HRC ex-works index in the United States reversed the global upward trend, despite the fact that spring tariffs had previously supported the market, and the index fell by $32.75 per ton between July 15 and August 12 and yesterday amounted to $ 857 per ton, the lowest since February. Customers have high inventories, little need to replenish them, and moderate lead times.