Global Cold Rolled Sheet Prices Drop Amidst Weak Demand and Economic Challenges

As of August 2^nd, the global Cold Rolled Sheet market is under pressure, with key regions like the US, Germany, and China witnessing challenges. In the US, abundant supply coupled with slowing demand, particularly in construction and the automotive industry, has led to a drop in prices. Elevated interest rates are dampening consumer confidence, resulting in sluggish procurement from service centres. In Germany, the market is also experiencing a downturn, driven by reduced orders in the mechanical engineering sector and a decline in manufacturing activity, all while supply continues to strengthen. The summer holiday period further slowed market activity, leading to cautious sentiment. China’s market faced disruptions from Typhoon, which along with weak demand from the construction and automotive sectors, contributed to a slight decrease in prices. Across all regions’, manufacturing activity has slowed, reflecting broader economic softness and uncertainty, with markets remaining vigilant for potential policy interventions to revive demand.

As of the week ending on August 2^nd, the US Cold Rolled Sheet market is encountering notable difficulties, marked by an increase in supply and a decline in demand, resulting in downward pricing pressure. Despite sustained production, domestic producers have been compelled to lower prices due to ample inventory levels. The construction sector, especially residential building, is facing a slowdown influenced by elevated interest rates impacting consumer confidence. The automotive industry's varied performance further contributes to the overall subdued demand for Cold Rolled Sheet. Service centres have scaled back procurement in response to sluggish end-user demand, exacerbating the imbalance between supply and demand. Additionally, according to FRED, the Producers Price Index decreased by 0.4% in June, indicating reduced manufacturing activity within the region, with an expected increase in July.

However, Germany's Cold Rolled Sheet market has experienced a price reduction, mirroring the current market conditions characterized by subdued demand and abundant supply. This price decrease aligns with the prevailing economic challenges, notably exemplified by decline in orders for German mechanical engineering and plant-building companies in the first half of 2024. Klöckner & Co, a prominent steel distributor, faced a tough second quarter, starkly contrasting with the prior year's profits. Furthermore, ArcelorMittal Europe noted a year-on-year increase in Cold Rolled Sheet shipments for the second quarter, indicating a strengthening supply landscape. The summer holiday period contributed to reduced market activity, impacting both local and international demand for Cold Rolled Sheet. Overall, the market continues to experience pressure with prices showing a slight decrease amid cautious market sentiment and fluctuating business activity across various sectors. Additionally, Germany's PMI declined in July, signifying a drop-in manufacturing activity within the region.

Additionally, Chinese Cold Rolled Sheet prices experienced a slight decline due to an imbalance between demand and supply. The China Cold Rolled Sheet market encountered a combination of challenges related to supply and demand. Supply dynamics were strained due to inventory build-ups and the impact of new quality standards. External disruptions, particularly Typhoon Gaemi, had a severe effect on logistics and production, leading to factory closures and halted mining operations in key regions. Despite these setbacks, there was a minor increase in molten iron production resulting from the restart of some blast furnaces. Furthermore, the market faced difficulties with vehicle production and sales declining, reflecting a broader economic softness. This sluggish demand for Cold Rolled Sheet, along with a weak construction sector and declining steel prices, contributed to a cautious market sentiment. Cold Rolled Sheet prices saw a marginal decrease, and the overall market remains watchful, anticipating potential policy measures to bolster demand. Additionally, in July, the Manufacturing PMI decreased by 0.2% based on data provided by NBS, indicating a slight decline in manufacturing activity compared to the previous month.

According to ChemAnalyst, Cold Rolled Sheet prices in the USA are projected to rise due to increasing demand across various sectors. An anticipated recovery in the construction industry is expected to drive up both sales and prices. Similarly, Germany is contemplating initiatives to bolster its domestic Cold Rolled Sheet sector, potentially influencing global price trends. Moreover, the expanding automotive sector in China is forecasted to stimulate global Cold Rolled Sheet demand. The heightened consumption from China, a pivotal market, could significantly affect global prices and market dynamics.