EU Mills Target Higher HRC Prices Despite Weak Downstream Demand
HRC offers increased by €5/t to €735–755/t EXW in Northern Europe and stayed at €720–740/t EXW in Southern Europe. Import offers into Italy remained unchanged at €580–600/t CIF.
Mills remain confident that limited domestic availability and reduced import competition will support further gains, while buyers continue to purchase cautiously and resist producers’ highest targets. Some plants are targeting EXW prices of around €800/t by year-end, provided buying activity strengthens.
Buyers have become somewhat more accepting of the new market level, but their purchasing strategy remains defensive. Prices around €720/t EXW, which were still being discussed earlier in September, are increasingly difficult to obtain, while prices around €750/t are becoming a more realistic benchmark. Nevertheless, weak downstream consumption and the absence of broad restocking are preventing a faster increase.
Service centers have little incentive to accumulate significant inventories while their customers continue to purchase conservatively, leaving mills without the demand momentum that would make their higher targets easier to achieve. “For buyers, the key question is how long they can continue postponing large purchases if material availability tightens further. At some point, they will have to return to the market,” a German distributor said.
The future of Acciaierie d’Italia’s Taranto operations remains uncertain. The company has begun shutting down the plant’s hot end, which must be idled by Oct. 28 under the court order, although its special commissioners have filed a further appeal with Italy’s Court of Cassation, which is scheduled to hear the case on Oct. 20. Meanwhile, Ferriera Valsider has yet to reopen its order book for new business and could have availability only for December production. These constraints have reinforced the perception that domestic supply in Italy could become tighter, supporting higher HRC prices.
Overseas HRC remains available and some new bookings from Turkey and India have been reported, but buyers are increasingly focused on the financial risks associated with safeguard quotas and CBAM. Uncertainty over the eventual carbon cost makes the effective landed price of imported material difficult to assess and can create significant financing requirements for traders.
WSD Take.
WSD projects EU HRC prices at €740–760/t EXW Northwest Europe for late September, with a further jump to €780–800/t anticipated over October–November. The market navigated July–August with moderate destocking, but the impact of reduced imports will be acutely felt from late September into October, when a supply deficit could emerge. Inventory dynamics in Q2 did not provide buyers with a meaningful buffer, as many preferred to avoid risk rather than build inventories.
Domestic supply is now the key driver of EU pricing. To achieve neutral inventory dynamics in Q3, domestic output would need to grow by 15% y/y — a scenario we consider highly unlikely. In Q4, the challenge of increasing domestic supply is compounded by a series of operational disruptions: the halt in operations at ADI, force majeure at the Ferriera Valsider plant in Italy and maintenance at Thyssenkrupp in Duisburg. Any output increase in late September and Q4 would require higher utilization rates, which in turn would strengthen mills’ push for improved margins and higher prices.