US Cold Rolled Coil Prices surge as Auto Industry Rebounds and Domestic Supply Squeezes

In the week ending November 17, Cold Rolled Coil prices in the US spot market have seen an upward shift due to recovering demand from downstream auto industries. This resurgence is attributed to new deals reached with the workers union. This week mills successfully negotiated higher Cold Rolled Coil prices as supply continued to tighten in the US spot market. Cold Rolled Coil mills throughout the market are scaling back production rates due to ongoing maintenance outages lasting several days.

Moreover, the recent approval of a new contract between the United Auto Workers (UAW) union and General Motors (GM) has contributed to a positive trade condition for Cold Rolled Coil. The supply of Cold Rolled Coil remains constrained, particularly as the cold mill at US Steel's Mon Valley mill in Pennsylvania is operating at reduced rates following a maintenance outage. US Steel confirmed a 14-day outage at its Irvin plant, part of the Mon Valley mill, during the end of October, including upgrades to electrical drives in the cold mill. The company is currently commissioning the electrical drive, resulting in reduced mill rates. Despite a backlog of fourth-quarter orders, US Steel is actively working with customers to meet their Cold Rolled Coil demands.

In addition to the Cold Rolled Coil production challenges, the Environmental Protection Agency has expressed concerns about the lack of climate policy progress in the US spot market. Furthermore, the recent months have seen the automotive industry grappling with the UAW strike, driven by factors such as the tight US labor market, expiring union contracts, and high living costs. The UAW's approval of a new contract with GM has resulted in significant pay increases, surpassing the company's initial offers, with union members gaining a 25% increase over the contract's duration, restoration of lost cost-of-living adjustments from the 2008/2009 financial crisis, and other concessions. Japanese automaker Toyota has announced plans to raise wages at its US plants in 2024, while Honda is set to implement an 11% pay increase starting in January These factors have supported the rising demand and price trend for Cold Rolled Coil in the US spot market.

According to ChemAnalyst, the Cold Rolled Coil price is expected to follow an upward trend, driven by sustained demand from downstream automotive industries and the energy sector. The ongoing negotiations between UAW and auto manufacturers, coupled with an improving employment market across the USA, are anticipated to further support the growth of the Cold Rolled Coil market in the country.