CRU Outlook: Trade policy will drive prices higher in importing markets

Domestic HR coil spot prices fell RMB50/metric ton m/m (-1.5%) in the latest period, as output continued to outpace demand. The near-term outlook is broadly flat, with some support from downstream sheet demand growth and limited cost support. The July Politburo meeting signaled no additional stimulus, consistent with prior expectations. There is a downside risk to prices if the normal seasonal demand recovery in September-October proves slower than anticipated. Upside price risk exists if mills respond to recently compressed margins by cutting production, particularly if this coincides with stronger-than-expected seasonal demand.

USA

Mill production and availability are expected to increase through the remainder of 2026 as prior maintenance outages ease, while scheduled autumn outages are limited. Seasonal demand softening and rising import arrivals of sheet and slab are expected to weigh on the market over the same period. The principal near-term risk to the price outlook is any change to blanket steel tariffs; specifically, potential reductions for individual countries, which would allow sheet prices to ease from current elevated levels.

Europe

Prices have risen faster than expected following the introduction of the new trade regime, with some evidence of a rush of buying at domestic mills in July as buyers adjusted to a greater weighting of domestic supply. Inventories are elevated, and underlying demand remains subdued beyond seasonal effects. Prices are expected to peak in September before declining amid high stock levels and weak real demand.

India

Sheet prices declined in August, though by less than forecast. Production curtailments have been announced for late August to early September, which will support prices. An ongoing anti-dumping investigation on HR coil imports from China, Russia, and Japan, on top of the existing 12% safeguard duty, has increased market caution. Seasonal restocking from late August is expected to be stronger than usual as buyers seek to build buffer stocks against potential supply disruption caused by trade policy.

Southeast Asia

Prices fell sharply in August, exceeding the expected seasonal decline amid the rainy season. Inventory levels remain above historical norms, and low-priced Chinese offers continue to weigh on regional market prices. A modest bout of restocking ahead of China’s Golden Week holiday period is expected to provide some near-term price support.

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