EU HRC Market Holds Firm Through Summer Lull as Mills Prepare for September
HRC offers held firm at €700–720/t EXW in Northern Europe and €690–710/t EXW in Southern Europe, while import offers into Italy remained stable at €580–600/t CIF.
Market participants described the first trading days of the month as exceptionally quiet, with buyers largely absent and many companies operating with reduced staff. Despite the lack of transactions, domestic prices remained supported by restricted import availability and relatively healthy mill order books. Producers appear confident that limited import competition and full third-quarter order books will allow them to return to the market with firmer offers after the summer break.
Buyers, however, remain skeptical and increasingly frustrated by what they perceive as a disconnect between pricing and real consumption. Service centers and distributors continue to point to weak downstream demand and limited opportunities to place large-volume orders. Many participants view the current market stability as supply-driven rather than the result of stronger consumption, leaving them reluctant to accept further price increases. “Buyers have adopted a defensive purchasing strategy, limiting themselves to hand-to-mouth buying. I don’t expect any meaningful pickup in purchasing activity before the end of August,” a German trader told WSD.
Import activity is negligible. New EU tariff-rate quotas and the continuing impact of CBAM have sharply reduced the attractiveness of overseas purchases, leaving most buyers focused on domestic supply despite concerns over price levels. Some market participants note that the lack of import pressure is effectively removing a key “safety valve” for buyers, increasing their sensitivity to any future attempts by mills to raise prices.
WSD Take.
WSD expects HRC prices at €710–730/t EXW NW Europe in August, with a jump to €780–800/t in September–November. Q3 imports are forecast to contract by 35–40% y/y. To balance the market without drawing down inventories, EU domestic steel output would need to rise by 4 million tonnes, or 13.5% y/y — a scenario we consider challenging. Margins are currently near their historical averages, offering mills no financial incentive to rush ahead of the market.
Buyers may opt to rebuild inventories given the clear upward price trend. We consider a modest price increase in August possible, despite the typically quiet summer holiday season. The import shortfall will be acutely felt in September — the start of the fall peak demand season — when we anticipate a sharp price surge. Domestic mills could build heightened import risks into their pricing formulas, incorporating a risk premium of 30–50% above import prices to account for quota overfill exposure.