EU HRC Prices Hold Firm as Mills Push Higher Offers
HRC offers stayed at €740–760/t EXW in Northern Europe and €720–740/t EXW in Southern Europe. Import offers into Italy remained unchanged at €580–600/t CIF.
Mills continue to approach the market with bullish expectations. Higher input costs, particularly electricity, are strengthening their determination to increase prices, while fewer viable sourcing alternatives are reducing competitive pressure from imports. Producers are therefore reluctant to make significant concessions.
Buyers, however, remain unwilling to follow mills’ higher offers. Inventories at service centers are still elevated, reducing the need for fresh purchases, as underlying consumption remains weak. The result is a market in which prices are supported entirely by supply-side factors rather than improving demand. This situation is creating particular pressure on service centers: competition for downstream orders has intensified, while companies are struggling to pass higher coil purchasing costs on to their customers.
Some service centers report that inquiries for 2027 volumes are declining compared with previous years. Companies are becoming reluctant to commit to long-term contracts because of uncertainty over future consumption. End users are increasingly focused on obtaining competitive bids, adding to the pressure on suppliers to sacrifice margins to secure orders. “Buyers understand that current market supply is enough to meet their needs. They don’t want to build up large inventories,” a German distributor told WSD.
The opening of fourth-quarter safeguard quotas on Oct. 1 generated some interest, but buyers remain cautious about overseas bookings because of import quota risks and CBAM. Competition for the limited import volumes considered commercially viable has also intensified.
Trading houses, service centers and re-rollers are competing for available cargoes, while smaller market participants appear increasingly reluctant to accept the risks associated with overseas purchases. This has weakened the traditional role of imports as a source of downward pressure on European mill prices. Traders consequently see the quota situation as an important source of support for domestic HRC prices. Expectations that fourth-quarter allocations could be exhausted relatively quickly are reinforcing the view that European buyers will eventually have to accept higher domestic prices. At the same time, traders remain cautious about purchasing additional volumes because weak downstream demand makes it difficult to judge how much material the market will actually need.
WSD Take.
WSD expects HRC prices at €780/t EXW NW Europe by the end of October, with further increases to around €800/t in November–December. Domestic steelmaking margins collapsed by €40/t in September. The current margin of €165/t is below the historical average of €180/t, offering little incentive to increase output and suggesting limited upside for EU supply. Even with lukewarm demand, mills appear likely to achieve €30–40/t price increases in the coming weeks.
Apparent consumption fell 13.0% y/y in July–August, while “real” activity in end-user sectors was broadly flat. This suggests buyers have been drawing down accumulated inventories to meet their needs and hold back price growth. WSD believes buyers have limited scope to keep deferring purchases. With supply substantially reduced, a return to more active buying should support price increases.