October 1, 2025:  EU HRC Market Drifts Sideways as Buyers Await Regulatory Clarity

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In Northern Europe, HRC offers held firm at €560-580/t EXW. Southern Europe recorded a €5/t drop to €535-555/t EXW, with import offers into Italy likewise slipping by €5/t to €480-495/t CIF.

Market sentiment remains subdued as participants express concern over persistently weak demand and deepening regulatory uncertainty. Despite efforts by mills to raise offers for fourth-quarter deliveries, buyers remain hesitant, citing minimal consumption, slow project pipelines, and the approaching implementation of the Carbon Border Adjustment Mechanism (CBAM).

Buyers show limited interest, pointing to full order books for the remainder of the year and an overall reluctance to build inventories in the current environment. Domestic price levels are considered unworkable, as real demand from downstream sectors, especially automotive and construction, is disappointing. While infrastructure funding in Germany has been announced, market participants believe its impact on actual steel consumption is unlikely to materialize in the short term.

Import activity remains minimal, despite lower offers. Some import suppliers already offer material for 2026 delivery with CBAM costs included (€20-40/t). “Traders want to keep shipments going, so they’re relying on preliminary CBAM cost estimates. There’s a chance those costs will be shared along the supply chain, meaning buyers might not have to absorb the full amount. In fact, some mills exporting steel have already signaled they’re willing to cover part of the expense themselves”, a German trader told WSD.

However, many buyers are avoiding new import bookings altogether due to the complexity and lack of clarity surrounding CBAM and the risk of exceeding EU safeguard quotas. There is growing concern that even deliveries scheduled for late Q4 might slip into 2026, triggering CBAM liabilities that are difficult to estimate.

WSD Take.

WSD expects a round of HRC price increases in November-December, reaching €610-620/t EXW NW Europe, with an average of €650/t in Q1. European steel demand is gradually recovering (+1.8% y/y in July), and the outlook for autumn remains positive. Nevertheless, the key drivers are currently on the supply side.

We expect a significant influx of imports in October, which will cap any price increase potential until November. A supply shortfall is likely in Q1 2026, driven by a collapse in imports. CBAM continues to pose risks for importers, with high uncertainty remaining over the mechanism’s final design and cost. The levy could raise import costs by €40-80/t, creating possibilities for domestic mill to increase margins.

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