July 16, 2025

EU HRC Prices Slide to 2020 Levels Amid Persistent Market Weakness

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Northern European HRC price offers fell by €10/t, reaching €540-560/t EXW. In Southern Europe HRC prices are stable – €520-540/t EXW. Import price offers dropped by €10/t to €450-470/t CIF Italy. Although import offers are historically low, many market players remain hesitant to book imports, citing regulatory uncertainties linked to CBAM and the evolving safeguard framework.

Across the region, mills are attempting to defend prices while struggling to balance full order books with dwindling demand. The market sees a disconnect between current spot offers and contract proposals for Q4: while some mills are pushing firmer offers for Q4, others continue to quietly accept discounted prices to secure volumes.

Many buyers are reluctant to commit under the current conditions, pointing to high inventories, weak downstream demand, and growing complexity from CBAM implementation. With the EU yet to publish full reporting methodology, most agree that uncertainty is the primary concern. “Traders do not understand how they will make deals under CBAM next year”, an Italian trader told WSD.

Some market sources note that mills in both Northern and Southern Europe have already filled substantial portions of their capacity, potentially limiting their ability to continue accepting low-priced orders and opening the door for price stabilization or a gradual rebound later in the year. Still, others believe the market remains oversupplied and that a true recovery will only take shape post-summer, once visibility improves around trade policy and regulatory enforcement.

The impact of US tariffs is also being felt, with some European mills reporting increased competition from Asian suppliers unable to access the American market. This shift is adding to the pressure, especially in the Southern European market, where Indonesian and Turkish material continues to undercut domestic prices.

WSD Take. In our opinion, flat-rolled steel appears to have found a floor near €550/t HRC, although bearish momentum may test lower levels near-term for some period. However, with July margins at €118/t HRC, steelmakers can`t afford any price discounts to fill order books. At current levels, margins fail to incentivize increased steel production.

A Q4 restocking phase to “get ahead” of CBAM will require increased domestic production, which isn’t possible without some margin improvement. As a result, we may see reduced local supply in the coming months to restore profitability – a key reason we view current price levels as nearing the “floor.”

By year-end HRC prices could rebound to €610-620/t on pre-CBAM restocking expectations. However, a more sustained rebound to higher levels is only expected by March-May 2026, as Q4 traditionally faces persistent import pressure.