Strong Global HRC Prices May Remain Range-Bound In Short Term

In January 2023, Hot Rolled Coil (HRC) prices saw a surge in many countries, including China. The export price of HRC in China was 120 yuan/ton higher than the average domestic price as of 31 January 2023, and this price difference increased by 117 yuan/ton from the previous month. It’s worth noting that the export price of HRC had risen significantly by 306 yuan/ton within a month (Dec 2022-Jan 2023).

Demand And Supply Mismatch

In January 2023, there was a significant mismatch between HRC supply and demand in the global market, which led to a surge in prices across several countries, including India, Europe, and the United States. This was mainly due to changes in the overseas supply and demand patterns, with the international market’s demand for 2023 expected to improve.

The price difference between China’s exports and domestic trade widened significantly in January 2023, driven by the expected improvement in overseas demand, which caused a rapid recovery of export steel prices. However, global HRC prices are expected to remain range-bound in the short term as overseas demand is still weak.

The current upward trend in HRC prices may slow down once the mismatch between global HRC supply and demand gets alleviated. This could be due to several factors, such as a decrease in demand or an increase in supply. Nevertheless, the fluctuation in HRC prices can have a significant impact on various industries that rely on steel products, and it’s important to closely monitor these trends.

Insight

In January 2023, the global HRC market saw a significant supply-demand imbalance. The upward trend in HRC pricing could level out when the supply-demand imbalance is corrected. It is important to monitor these developments, as steel product prices have a significant impact on many industries.

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