EU HRC Prices Edges Higher on Tight Supply
HRC offers rose €10/t to €680-700/t EXW in Northern Europe and to €660-680/t EXW in Southern Europe. Import offers remained at €510-530/t CIF Italy. So, the European HRC market extended its upward movement at the start of March, supported by firmer transactions and strengthening mill confidence, even as underlying demand remains subdued.
The latest gains are widely attributed to strong mill order books and extended lead times, with most producers largely sold out of April volumes and now focusing on May deliveries. The slowdown in import activity following the introduction of CBAM, combined with expectations of tighter safeguard quotas later this year, continues to shift bargaining power toward domestic suppliers.
Sentiment across the market remains cautiously bullish. Some buyers, including service centers, continue to book volumes despite comfortable inventories, recognizing that regulatory constraints on imports are real and unlikely to ease in the near term. Distributors have already lifted their own resale prices by around €20/t and are showing little urgency to discount, expecting further domestic increases once new quota rules take effect.
At the same time, questions about the sustainability of the rally are becoming more pronounced. Consumption has not materially improved, and some downstream players acknowledge that the current price rise is driven primarily by supply-side policy changes rather than demand recovery. Some service centers are still offering competitively priced material from older stock, creating tension between replacement costs and existing inventory valuations.
Broader macroeconomic risks are also entering the conversation. Rising oil and gas prices linked to geopolitical tensions are increasing concerns about higher electricity costs. Reports of rising freight and insurance costs are adding further pressure to import economics, reinforcing the view that overseas supply could be constrained. “We haven’t yet seen a tangible impact from the escalation in the Middle East. However, uncertainty is clearly rising, as the situation could change in the future”, German trader told WSD.
WSD Take.
In Q2, WSD forecasts a strong rebound in imports, with volumes likely to match the last year`s levels. This will be particularly evident in April, as the market actively rebuilds inventories ahead of the tightened TRQ volumes. Amid rising import flows and increased domestic output, price increases in March-April will face headwinds. In particular, the EU steelmaking margin widened to €177/t as of mid-February – this level is in line with the historical average, that means incentives for domestic steelmakers to increase production.
WSD expects potential price increases in May-June to €730-750/t, once import opportunities are exhausted towards the end of Q2. Under new TRQ, €780-800/t of HRC is seen as the benchmark above which over-quota imports become viable.