EU HRC Market Stalls as Buyers Await Safeguard Clarity
HRC offers remain at €680-700/t EXW in Northern Europe and €670-690/t EXW in Southern Europe. Import offers are stable at €600-620/t CIF Italy.
Trading activity remains extremely limited as market participants continue to wait for details of the EU’s new safeguard regime, which will take effect on July 1. Uncertainty surrounding country-specific quota allocations is the dominant factor shaping sentiment. Buyers, traders and distributors largely refrain from making major purchasing decisions, preferring to wait until the final structure of the new trade framework becomes clear.
Many market participants suggest that purchasing activity is unlikely to improve significantly before the summer break, especially given the absence of any clear demand recovery in steel-consuming sectors. “We have entered the typical summer lull in the market, when any short-term price fluctuations are possible. However, I would not expect the full impact of changing market fundamentals to be reflected in prices before the autumn,” a German trader told WSD.
Import activity remains particularly weak. Buyers show little interest in imported material despite competitive offers from Turkey, India and Southeast Asia. The risks associated with uncertain quota allocations and future CBAM costs are considered too high to justify new purchases. Traders also confirm that the import business has largely stalled, with many preferring to wait until the new trade regime becomes operational before actively offering material again.
WSD Take.
WSD expects prices to rise to €730-750/t NW Europe EXW by the end of June; the jump will be sharp, with subsequent growth above €800/t in September-November. Foreign arrivals will stay elevated through June because the dominant shippers are TRQ-exempt. For now, however, there is little interest in imports, as it is impossible to plan volumes and weigh risks until country allocations are released. Importing is currently deemed highly “hazardous,” forcing buyers to rely heavily on local steel mills.
As a result, in July-August, the main source of supply for the EU market will likely be local mills, which will give them greater leverage in negotiations with buyers. Domestic mill margins are hovering near €160/t, which is well below the historical €180/t average, offering little incentive to restart mothballed plants or boost output. Accumulated inventories will help cushion the supply shock during that period, but avoiding purchases today will leave buyers vulnerable during the peak season in September-November, when we expect a price spike to €800/t and higher.