Limited Import Supply Supports EU HRC Prices, But Demand Remains Subdued

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HRC offers are stable compared to previous week at €630-650/t EXW in Northern Europe and €620-640/t EXW in Southern Europe. Import offers are steady at €490-510/t CIF Italy. While producers push new offer levels higher, trading activity remains restrained, with most buyers resisting aggressive pricing and focusing on immediate needs.

European mills, facing reduced competition from overseas suppliers due to Carbon Border Adjustment Mechanism (CBAM) implementation and upcoming safeguard changes, have shown little urgency in expanding output. Market participants note that many producers still have capacity for March deliveries but are holding back volumes to maintain pricing leverage.

While some transactions were heard just below the €640/t EXW level in Germany and Benelux, ArcelorMittal’s announcement of €700/t for April delivery was met with skepticism. Buyers say that such pricing remains above what the market is currently willing to pay, especially given slow restocking by service centers and limited forward visibility. “ArcelorMittal, as usual, is setting the tone for price movement, but that doesn’t necessarily mean transaction prices will reach those levels”, German distributor commented WSD.

Import activity continues to contract, with Asian-origin offers seen as theoretically competitive but practically unworkable once CBAM costs and quota uncertainty are factored in. The combination of regulatory ambiguity and extended delivery timelines has discouraged buyers from committing to non-European supply. This is particularly evident in Italy, where traditional import-reliant segments are now turning to local sources despite higher prices.

Sentiment remains cautious across the value chain. While mills are preparing for a tighter Q2 market, underpinned by trade protection measures and constrained imports, buyers are showing no urgency to commit beyond near-term coverage. Most acknowledge the structural pressure on supply but remain unconvinced that demand fundamentals will justify steep price hikes in the coming months.

WSD Take.

WSD forecasts Q1 HRC prices at €640-660/t NW Europe EXW, with a further increase to €730- 750/t by July 2026 when the new TRQ system comes into effect. Amid prevailing uncertainty, imports into the EU are only viable on a DDP basis, with import prices needing to be at least €20/t below EU EXW levels to incentivize traders. The €50/t increase in EU flat-rolled prices since October 2025, supports imports associated with a CBAM payment not exceeding €70/t. Suppliers with a CBAM payment above €70/t are forced to reduce their FOB prices.

The higher risk and cost of imports due to CBAM have shifted buyers toward local steelmakers. We expect EU steel output to grow by 6-7% y/y in Q1-Q2. However, robust imports could undermine this forecast. As of mid January, CBAM has not acted as a technical barrier, as evidenced by active import activity at the start of the year. If the expected 20% import contraction due to CBAM does not materialize, raising prices from current levels before April will be challenging, although rising raw material costs may push prices higher in the coming weeks.

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