EU HRC Market Pauses to Assess Impact of New Import Quotas
HRC offers remained at €680-700/t EXW in Northern Europe and €670-690/t EXW in Southern Europe. Import offers are stable at €600-620/t CIF Italy.
The publication of country-specific quota allocations disrupted trading throughout Europe. Many importers temporarily suspended purchasing activity to assess their exposure under the new rules, while some companies focused on resolving issues related to cargoes already in transit. The sharp reduction in quotas for several traditional suppliers, particularly Turkey, reinforced expectations of tighter import availability in the coming months and strengthened the case for higher domestic prices.
Domestic mills in Italy temporarily withdrew offers while reassessing pricing strategies in the new import environment. In Northern Europe, producers with healthy order books began testing higher prices. However, the market did not accept the higher prices. Trading itself remained limited. Buyers continued to take a wait-and-see approach, arguing that it was still too early to assess the practical impact of the new quota regime.
New import offers and inquiries were scarce as buyers concentrated on managing existing shipments rather than booking new cargoes. Several import transactions were reportedly canceled before the new regime entered into force to avoid quota-related risks. Market participants also suggested that some import cargoes could be redirected to alternative destinations after becoming uneconomic under the revised quota allocations.
Although most market participants expect tighter import restrictions to support higher flat steel prices over time, sentiment remains cautious. Buyers believe weak underlying demand and the summer holiday season will prevent any sharp increase in HRC prices in the near term, even as producers attempt to capitalize on the new trade protection measures.
WSD Take.
In July-August, a rapid surge in pricing appears unlikely, with a more gradual increase possible amid seasonally weak demand. In September-November, WSD expects HRC prices close to €800/t due to lower import availability, a lag in domestic supply growth and depleted stocks.
Integrated domestic mill margins edged up to €178/t in mid-June on lower raw material and energy costs. Still, this provides no incentive to ramp up local supply, which is necessary after TRQ volumes tighten. The pause in buyer activity in June is set to result in a substantial erosion of inventories. The inventory build-up since Q4 2025 is expected to be broadly neutral, which will leave buyers vulnerable in Q3 amid a supply shock from reduced import availability.