EU HRC Market Enters Summer Standstill as Buyers Resist Higher Prices
HRC offers rose €10/t to €700–720/t EXW in Northern Europe and €690–710/t EXW in Southern Europe, while import offers into Italy fell €10/t to €580–600/t CIF.
Market sentiment reflects a growing disconnect between mills and customers. Steelmakers remain convinced that reduced import competition will eventually support higher domestic prices, but buyers see little justification for further increases while end-user demand remains exceptionally weak. Many consumers continue to purchase only the minimum volumes required, trying to negotiate discounts rather than accept higher offers.
Service centers and distributors are largely unwilling to build inventory, preferring to operate on a hand-to-mouth basis amid uncertainty over downstream consumption. Several buyers indicated that visibility into order books remains limited, with construction and manufacturing demand showing no clear signs of recovery. This lack of confidence has reinforced a cautious procurement strategy, with many opting to delay commitments in anticipation of clearer demand signals after the summer break.
The Italian market is even quieter as many participants prepare for the August shutdown period. Buyers report very limited trading activity and expect many mills to suspend production and deliveries during the first half of August. According to market participants, producers are increasingly absent from spot negotiations while reassessing their commercial strategies ahead of the post-holiday period. “This is typical behavior for mills in August. Their absence could strengthen their pricing power when negotiations resume later,” an Italian trader said.
Several market players described the current environment as one of “wait-and-see,” where both sides are reluctant to take positions ahead of September. While mills are hoping to re-enter the market with firmer pricing after maintenance stoppages, buyers are increasingly skeptical that demand conditions will justify any meaningful rebound in prices.
WSD Take.
WSD expects HRC prices at €710–730/t EXW NW Europe in July–August, with a jump to €780–800/t in September–November. Domestic supply in Q3 is likely to lag behind demand, despite 4.6% y/y growth in June. We expect Q3 imports to contract by 35–40% y/y. To offset the import decline without drawing down inventories, EU output would need to grow by double digits, and margins are currently near their historical averages, offering mills no financial incentive to rush ahead of the market.
We consider a modest price increase in August highly likely, despite the summer holiday season, as buyers could opt to rebuild some inventories ahead of the fall demand peak, a move further encouraged by rising energy costs. September is set to bring a price rally as EU mills are likely to adopt import parity pricing formulas, incorporating a risk premium of 30–50% above import prices to account for quota overfill exposure.