Limited Deals and Policy Uncertainty Shape EU HRC Market
HRC offers remain at €710-730/t EXW in Northern Europe and increased by €20/t to €700-720/t EXW in Southern Europe. Import offers into Italy rose €20/t to €550-570/t CIF.
Steelmakers appeared relatively comfortable as strong order books for the second quarter and limited availability for June delivery reduced the urgency to chase new customers. Some producers remained absent from the spot market altogether, while others maintained firm offers and focused on selective sales. The overall approach suggests confidence among mills, supported by constrained imports and expectations of tighter supply conditions later in the year.
Buyers, however, maintained a more cautious stance. Service centers and end-users continued to rely on existing inventories, with purchasing largely limited to essential volumes. Uncertainty surrounding country-specific import quotas under the new safeguard system, set to take effect from July, remained a key factor holding back activity. Concerns over how these rules will interact with Carbon Border Adjustment Mechanism have further complicated procurement strategies, particularly for imported material.
While domestic trading was quiet, a small number of Turkish cargoes were reported sold into the EU. However, such deals remain sporadic, and overall import interest is subdued due to regulatory uncertainty and cost risks tied to CBAM and future quotas. “The impact of CBAM is largely absorbed by importers, who are finding ways to manage the associated risks. The bigger concern now is TRQs, as buyers need clarity on quota allocation before committing to new orders”, an Italian trader noted to WSD.
Market sentiment remains mixed. On one hand, producers and some traders point to supportive fundamentals, including limited imports, stable order books, and expectations of stronger pricing power in the second half of the year. On the other hand, buyers continue to question the sustainability of current price levels amid weak underlying consumption and broader economic uncertainty.
WSD Take.
WSD forecasts HRC prices in May at €740-760/t NW Europe EXW, with the Q3 forecast at €820-860/t. Prices could trend toward the lower end of this range if summer import prices decline amid Middle East deescalation.
With two months left in the quarter, the risk of disruptions to import delivery schedules by the end of Q2 is rising, which would turn buyers toward local supply. Domestic supply is in no rush to grow: in January-March, it increased by just 2.0%, insufficient to cover the decline in imports.
However, inventory dynamics in Q1 are likely to remain close to neutral. If this trend continues in Q2, buyers will be vulnerable to supply tightness and rising prices in Q3–Q4. The allocation of country-specific quotas under the updated TRQ is likely to be published only in June, which results in insufficient lead-time for normal contracting for July imports.