EU HRC Mills Push Higher Prices while Buyers Resist Supply-Driven Rally
HRC offers rose by €10/t to €730–750/t EXW in Northern Europe and to €720–740/t EXW in Southern Europe. Import offers into Italy remained unchanged at €580–600/t CIF.
Producers have become increasingly confident that the market can absorb higher prices. Their optimism is based primarily on tightening supply. The new EU safeguard regime and CBAM have reduced the attractiveness of imports, while restricted availability from some European producers has further tightened the market. Rising energy and production costs have added another reason for mills to defend higher offer levels.
Buyers and service centers see the situation differently. Although they acknowledge that the supply environment has changed, many remain reluctant to accept the full extent of mills’ increases. Inventories at service centers are still considered relatively high, while demand from major steel-consuming sectors remains subdued. Some industrial customers are reportedly still working through material purchased several months ago, reducing the immediate need for restocking.
Although distributors accept that CBAM and tighter EU import restrictions will keep European steel prices structurally higher, they also see limits to how much additional cost end users are prepared to absorb. “We are in a difficult position. The cost of replenishing inventories is rising, but we are unable to pass higher coil prices on to our customers. Rising steel prices are discouraging buyers from placing new orders,” a German distributor noted.
Market participants therefore remain divided over the sustainability of the current price recovery. Mills point to firm order books and limited booking capacity, while buyers argue that supply is not the only constraint, since demand remains equally limited. Some producers have also been slow to fully return to the market after maintenance, making it difficult for buyers to determine how tight availability will actually be once normal trading resumes.
Import activity remains limited. Although some offers from Türkiye and Asia may seem attractive at first glance, reduced quotas, higher duties on volumes exceeding them and uncertainty over final CBAM costs make the effective landed price difficult to predict.
WSD Take.
WSD projects EU HRC prices at €740–760/t EXW NW Europe for September, with a further jump to €780–800/t anticipated over October–November. Import contraction remains the main disruption to EU supply. In July–August, EU steel imports provisionally fell by 40% y/y, with a steeper decline of 43–45% y/y anticipated for the full Q3. The uptick in domestic supply is clearly insufficient to offset the import shortfall. EU steel output rose by 3.8% y/y in July, though a 15% y/y quarterly increase would be required to compensate for the import drop while keeping inventory dynamics neutral.
The trajectory of domestic supply will be a critical price driver for the EU market in the coming months. In Q4, ramping up domestic production will prove challenging, given the expected outage at Acciaierie d’Italia (ADI) and maintenance work at Thyssenkrupp Steel Europe in Duisburg. Import bookings will remain risky and offer limited arbitrage appeal. Under CBAM rules, importers are required to hold CBAM certificates covering 50% of the embedded emissions associated with their quarterly imports by the end of each quarter. For Q1 2027 deliveries, elevated default emissions values are highly likely to be applied. This could result in additional CBAM costs of €18– 20/t of steel for imports from Indonesia, €8–10/t for Indian material and €3–4/t for supplies from other Asian countries.