For the Quarter Ending June 2023

North America

During the second quarter, the price of Stainless-Steel HR Coil in North America experienced a decline, primarily attributed to the deteriorating economic conditions. The USA's economy saw a downturn as major banks faced crises, leading to a debt crisis. The combination of rising inflation rates and increased interest rates cast a pessimistic shadow over the market sentiment. Consequently, the weakened economic state reduced buyers' purchasing power and led to a surge in local Stainless Steel inventory levels. Initially, the first half of Q2 witnessed a sustainable rise in Stainless-Steel HR Coil prices, driven by a rebound in feedstock Nickel prices. US mills maintained high base prices, and the addition of alloy surcharges further boosted prices in the US spot market. However, market conditions worsened in the latter half of the quarter, with reduced consumption from the downstream automotive sector due to lower sales amid the rising inflation rate. Additionally, a labor shortage in the USA led to decreased activity in the construction sector, further reducing demand for Stainless-Steel HR Coil. Overseas Chinese stimulus measures contributed to a decline in feedstock commodity prices, such as iron ore and NPI, in both the global and US spot markets. Buyers became hesitant to place substantial orders, prompting local mills to lower their offer prices.

Asia-Pacific

In the Chinese Stainless-Steel market, the second quarter of 2023 witnessed a decline in the price of Stainless-Steel HR Coil. Initially, in April, prices surged due to the rebounding feedstock Nickel prices, creating favorable market conditions and profitability for Stainless-Steel manufacturing units. The declining inventory of feedstock Nickel and increased funding in the Chinese market contributed to an optimistic market sentiment that supported price increases. The rising price of Stainless-Steel scrap further strengthened the local Chinese mills' position. However, in the latter half of the second quarter, the price trend reversed, ultimately resulting in a decline in the Stainless-Steel HR Coil price. In May, macroeconomic factors such as rising inflation rates and economic uncertainty created a bearish sentiment for Stainless Steel HR Coil. Despite high production rates in Stainless-Steel mills, regional holidays and economic instability led to reduced construction activity in the Chinese spot market. Towards the end of the quarter, the Chinese government implemented various stimuli to bolster the economy, but buyers remained cautious, prompting local mills to reduce their offer prices.

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Europe

The price of European Stainless-Steel HR Coil saw a decline in the second quarter, driven by a pessimistic market sentiment in the downstream construction and automotive industries. Germany's economic condition deteriorated as it entered a recession, negatively impacting construction activity in the German spot market. The combination of rising inflation rates and increased construction material costs further fueled the pessimistic sentiment. Simultaneously, labor shortages became a major concern as worker organizations protested in front of Belgian headquarters, demanding equal payment for workers hired by local contracting companies. They called for the initiation of a centralized recruitment process across all construction and building industries. Furthermore, the German spot market's downstream automotive industry suffered, with major car companies like Nissan and Kia shutting down plants across Europe due to reduced customer purchasing power and declining vehicle sales. Uncertainty in market sentiment led customers to hesitate in placing large orders, prompting local mills to reduce their offer prices for Stainless-Steel HR Coil in Germany.


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