Steel Prices

CRU: Q3 will be the lowest point in current sheet price cycle

July 11, 2025

In most parts of the world, CRU is expecting a restocking cycle due to either low inventories or seasonally stronger demand, which will support prices generally upwards as we move through the next few months. India, however, is going to remain an outlier.

US sheet prices will remain range-bound in August and before increasing marginally in September and October. This increase will come from seasonally stronger demand while service centers have worked down excess inventories built in H1’25.

There are a couple of risks to this view, however. Though import arrivals have started to fall, domestic sheet supply remains plentiful from the continued ramp-up of new EAF-based facilities and new galvanized lines. Also, over the near term, we expect trade deals to emerge, and as they do, any agreements that lower the tariff rate on steel will likely lead to lower sheet prices.

European sheet prices are approaching a production cost floor, and producers will cut supply when this happens to balance the market and maintain margins. We have seen similar supply responses from mills in the longs market to maintain margins. Also, as CBAM implementation begins from Jan. 1, 2026, we expect that domestic mills will receive increased orders as buyers factor in CBAM liability in procurement decisions. These factors will drive price increases following the current decline.

Chinese sheet prices will generally trend upwards over the next few months. We are expecting a restocking cycle soon, as sheet inventories have been declining since February, and HR coil inventory levels are now close to a 2-year low. Also, from September, we expect an improvement as it is a seasonally strong period for sheet end-use sectors. Uncertainties from worsening trade frictions and additional stimulus measures in later parts of 2025 are risks to the outlook.

Indian sheet prices, however, will be under pressure in the near term. The government has deferred the implementation of the new quality control order, which will require a government-approved quality certification for imports of semi-finished steel. The deferment means that customs will now clear non-compliant imports, which were stuck at ports and fed into the domestic market in the seasonally weak Q3.

Brazilian sheet prices will remain stable for the short term as imports and inventory levels have been high, yet we expect a destocking phase to emerge. If the current domestic Brazilian HR coil price remains where it is versus the Chinese import parity price, imports under the temporary quota system (a duty of 10.8%) as well as imports without a quota (import duty of 25%) will fall over the near term. This decline will allow inventory levels to correct.

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The analysis above was first published by CRU. To learn about CRU’s global commodities research and analysis services, visit www.crugroup.com.