EU HRC Prices Rise as Market Returns from Summer Lull
Over the past two weeks, HRC offers rose by €15/t to €715–735/t EXW in Northern Europe and €705–725/t EXW in Southern Europe. Import offers into Italy increased by €10/t to €580–600/t CIF.
Producers have become increasingly confident about the fourth-quarter outlook. The new tariff-rate quotas introduced in July, combined with CBAM and existing trade defense measures, have sharply reduced the attractiveness of imported material and forced buyers to rely more heavily on European supply. Mills expect this shift to become more visible as inventories accumulated before the summer are depleted and customers return for fourth quarter restocking.
Buyers and service centers remain less convinced. Although some larger customers have returned to the spot market, many are still attempting to purchase at pre-summer prices. Service centers continue to describe the market as predominantly supply-driven, with limited improvement in real consumption. This has created a growing gap between mills’ expectations for further increases and buyers’ willingness to accept them.
The mood among distributors is similarly cautious. Many recognize that the new trade environment has significantly reduced their sourcing alternatives, but they remain reluctant to build inventories aggressively without clearer signals from downstream customers. At the same time, concerns are increasing that domestic supply may not be sufficient to fully replace lost import volumes if restocking accelerates in September.
Supply-side disruptions are reinforcing bullish sentiment. Low water levels on the Rhine have affected raw-material deliveries and contributed to production cuts and shipment delays at some German plants. Buyers are also watching the situation in Southern Europe, where the potential shutdown of the hot end at Acciaierie d’Italia’s Taranto plant could further tighten HRC supply for re-rollers and pipe producers.
Import activity remains limited as offers are close to domestic prices. For example, Asian material was reported at around €720–740/t DDP Italian ports, while offers into Northwest Europe were heard at around €740/t DDP Antwerp. However, quota risks, CBAM costs and other duties have significantly reduced the appeal of imported HRC. “I don’t see much interest in imports at the moment. Buyers are reluctant to take on additional risks and prefer domestic offers when they actually need to secure material,” an Italian trader told WSD.
WSD Take. The latest price moves have confirmed our previous forecast that HRC prices in Northwest Europe would reach €720–730/t EXW in August. We expect a further jump to €760–800/t in September–November amid tightening supply as imports remain highly risky and are not a viable option at current prices.
Low river levels constrain domestic output, particularly in Northwest Europe. A shift to rail is unlikely to compensate for the shortfall, given the lack of available rail capacity. The problem is unlikely to ease before fall and the start of the rainy season. A rise in logistics costs is highly likely to be passed through to prices, supporting further increases.
The import shortfall is likely to become acute in September. Domestic pricing may continue to be benchmarked against import prices. But while import prices may move lower, the tight quota regime means that Asian import prices will no longer define the import parity price — instead, the average import price should be used with a 30– 50% premium to CIF prices to account for risk.