CRU Outlook: Global steel sheet prices set to rise, but the near-term uptrend will be limited

US: price rises will be limited by rising domestic capacity

Sheet prices in the US are expected to increase in the near term, as mill maintenance outages are scheduled to take place in September and October. Import arrivals are likely to fall further due to the impact of the 50% Section 232 tariff.

These factors, alongside stronger seasonal demand in September and October, will tighten supply and support mill price rises. However, rising domestic capacity in the US is likely to limit price increases in both duration and magnitude.

Europe: Restocking and seasonal factors balanced by weak underlying demand

European domestic sheet prices are likely to continue to increase in the coming weeks due to some restocking and seasonal real demand strengthening after the summer holidays. As highlighted last month, coated sheet stocks in Germany are extremely low, and there is some potential for demand from the inventory cycle.

However, demand from steel-using sectors is not expected to materially increase, and therefore, price upside is likely to be limited.

Asia: Level of rise uncertain as demand, inventories, imports, and new policies affect APAC markets differently

In Asia, Chinese domestic sheet prices are expected to increase in the coming weeks. However, currently high inventory levels in the country will likely limit the extent of those gains despite the approaching peak season. The pace of price recovery in China will depend on how quickly demand strengthens to absorb traders’ inventories.

East Asian countries are likely to mirror China’s price uptrend. Sheet prices in Southeast Asia are expected to increase in the near term due to the strengthened domestic demand for hot-rolled (HR) coil in Vietnam. However, the rise in domestic prices in the region is likely to be limited as significant increases would prompt buyers to switch to imports.

In Japan, sheet prices are also likely to recover in the coming weeks as buyers are starting to restock, and demand is expected to strengthen in autumn. However, the increase in prices is also expected to be limited, given South Korea’s recent imposition of provisional anti-dumping duties on Japanese HR coil imports.

In India, sheet demand is expected to remain subdued for the remainder of September, due to sheet and sheet-containing goods high inventory levels in the market. This is likely to continue preventing Indian sheet prices from rising substantially.

Most buyers are expected to resume restocking only from October, when market stocks will be lower. The reduction in Goods and Services Tax is expected to boost demand for several steel-containing goods from late September. The strength of this buying activity will determine the extent of the increase in sheet prices in October.