EU HRC Prices Firm as Import Constraints Shift Market Sentiment
HRC offers rose €10/t to €690-710/t EXW in Northern Europe and €20/t to €680-700/t EXW in Southern Europe. Import offers increased €20/t to €520-540/t CIF Italy.
Market sentiment has improved modestly in recent days. Sellers report that inquiries have picked up compared with previous weeks, while buyers acknowledge that tightening import supply is gradually shifting purchasing decisions toward domestic mills. Freight disruptions and longer delivery times for overseas shipments linked to geopolitical tensions in the Middle East and rerouting of vessels around the Cape of Good Hope have reinforced this shift.
Despite the firmer tone, market participants remain aware that the price rally is being driven primarily by supply-side pressures. The introduction of the Carbon Border Adjustment Mechanism earlier this year, combined with expectations of tighter EU safeguard quotas from July, has significantly reduced appetite for imports. Additional pressures such as higher freight, insurance and energy costs have further weakened the competitiveness of overseas coil.
At the same time, demand from end-users remains relatively subdued. Many service centers and distributors continue to purchase cautiously, focusing mainly on replenishing essential volumes rather than building significant inventories. Nevertheless, some buyers have started returning to the market after previously delaying purchases, concerned that logistical disruptions and regulatory changes could tighten supply later in the year.
Producers appear to be taking a measured approach to the current uptrend. With order books already relatively strong and lead times extending toward May deliveries, mills have continued to sell selectively while evaluating how far the market can sustain higher price levels. Market participants generally expect further increases in official offers, though most believe the adjustment will remain gradual rather than abrupt. “The market is inertial. Customers are gradually adjusting to the new reality and slowly returning to place orders”, a German distributor told WSD.
WSD Take.
WSD forecasts HRC prices in March-April at €690-710/t NW Europe EXW, with a gradual increase to €760-780/t by June-July. With April import volumes likely largely already committed, buyers are being forced to turn to domestic supply, which is not ramping up quickly. However, margins for integrated steelmakers have improved to €206/t, above the 2017-2019 average of €180/t, providing significant incentive to increase output.
In Q2, WSD forecasts a strong rebound in imports, with volumes likely to match last year’s levels. This will be particularly evident in April, as the market actively rebuilds inventories ahead of tightened TRQ volumes from July. The next round of flat-rolled price increases could occur in late April-May, when import volumes will no longer be available for delivery in the second quarter.