US HRC prices plunged by 20% Q-o-Q, driven by slow demand and the ongoing UAW strike, which is eliminating ~6kMT of steel consumption per day. Steel Mills including Cleveland Cliffs have attempted to pass along price hikes in order to stem the price erosion, but it is unclear if these will stick in a lackluster demand environment. Production costs have started to close in on spot market pricing, indicating a floor in the market might have been reached and a mild rebound is possible in Q4, especially if a resolution to the UAW strike is reached.

EU HRC prices fell by 9% Q-o-Q on lower demand and fierce import competition. Imports from APAC (excl. China & S. Korea) skyrocketed in Q3, particularly from India. EU prices are also likely reaching a floor as they face similar parity between production costs and spot prices as seen in the US market. Despite the weaker market, producers were hesitant to reduce premiums for Green Steel, indicating resilience from broader market fundamentals.

CN HRC prices were down by 3% despite economic stimulus measures and efforts to curb steel production from its peak in Q1 ’23. The extended period of high production levels in China has contributed to increases in Iron Ore and Coking coal prices, which are up 8% and 26% Q-o-Q, respectively. Exports continued at a healthy pace despite a shrinking spread between regional spot markets.