Analyse de marché / septembre 2024
Analyse du marché de l'acier · septembre 2024
September 2024 Issue
Q1 2025 import orders are landing now, and NA HRC has jumped 15% in two months. With the Loonie at 1.35 and US elections weeks away, Canadian buyers should lock contracts in CAD for early-2025 delivery rather than gamble on USD.
Matthew Barazin
Managing Director, Intermetalink · 26 septembre 2024 · 2 min de lecture
Demand
- Steel import orders have increased in the month of September for a January-February readiness as procurement managers forecast their steel needs for 25Q1.
- Lowered demand and sales have been reported by most wholesale and distribution companies when looking at YoY data.
- Infrastructure projects continue to be a larger than normal part of bidding and demand for steel pipe and steel products as we finish 2024 and move toward 2025 with new orders matching project commencement timelines.
Buying steel in CAD today for a Q1 2025 delivery is a cannot go wrong situation.
Supply
- North American HRC mills continue to announce planned mill closures due to demand or maintenance for 2024Q4.
- Freight rates from the Gulf to North American ports remain elevated, impacting import competitiveness in US markets particularly.
- Wholesale and distributor supply levels may be lower than normal due to low booking activity throughout 2024Q2.
Geopolitics
- Chinese steel blanket tariff implemented as of all shipments after October 15th of 25% to Canada. Canada followed the same tariff applied by the United States weeks prior. China has followed with limited exports of critical materials, antimony is of note due to its use in the manufacturing of batteries, diodes and hardening of steel for military use.
- We expect US elections no matter the outcome to finalize with more tariffs and trade war actions towards trading partners, and Canada to mirror the US moves.
Raw Material
- North American HRC has increased from $684/ST (Mid July) to $791/ST (today) + 110/ST, a 15% increase. This will move the needle up on pipe and tube mills domestically.
- Iron ore, scrap and coking coal are still trending sideways, which presents a buying opportunity for managers.
Freight
- Ocean Freight remains high on most routes into North American ports. We believe freight is tightly connected to nation-to-nation trade issues. We expect trade tensions to grow, therefore expect higher freight rates for longer into and after the US elections.
Réflexions finales
Canadian market:
The two major factors for Canada is domestic HRC prices and our Loonie.
With the Loonie stubbornly staying low, we remain that buying steel in CAD dollars today (1.35) for a 2025Q1 delivery is a cannot go wrong situation. We expect the Loonie to lose value in the next 6 months as we see more expected volatility from US stock markets.
So paying your steel vendors at a fixed price in the future in Canadian dollars when the Canadian dollar will be worth less in the future is a good strategy.
Stay away from buying import steel on a long lead time in USD, this will hurt if you need to pay those US dollars and they cost more in Q1 of next year.
US market:
The US markets have been hard to navigate in the last month. As US mills have been competeting in price points with import offers.
We still believe value added items from the Gulf mills we represent (Galv, TC and Large Diameter) are to be seriously review, even in this environment.
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