Regulatory Tailwinds Support EU HRC Prices, Though Demand Stays Weak

Click here to sign up today for a free three-month trial to receive all the articles in the Industry News service along with our monthly Forecast Reports.

HRC offers remained at €660-680/t EXW in Northern Europe and €640-660/t EXW in Southern Europe. Import offers rose €10/t to €510-530/t CIF Italy.

Market participants reported that ArcelorMittal was seeking to lift its offer price for May delivery to €750/t delivered in Northern Europe, up from €700/t for April shipments. While the increase has not been formally confirmed, it reinforced expectations that mills are preparing the ground for another leg up in prices, supported by solid order books and tightening first-quarter availability.

Despite the firmer tone from steel mills, trading activity remains muted. Many service centers and end users continue to work through elevated inventories built during the second half of 2025, when both domestic and imported material was secured ahead of CBAM implementation. Real consumption, particularly in the automotive sector, has yet to show meaningful improvement, limiting buyers’ willingness to restock aggressively. “Demand hasn’t changed much in recent weeks. Order intake remains limited, as most buyers prefer to stay on the sidelines for now”, German trader told WSD.

Market participants increasingly acknowledge that the current price strength is driven less by demand recovery and more by regulatory factors. The combined impact of CBAM and the upcoming safeguard changes has curtailed import appetite and reduced competitive pressure from overseas suppliers. This has allowed European mills to test higher targets, even in a fundamentally weak consumption environment.

Distributors describe a delicate balance: mills clearly hold upward momentum, but stockholders are struggling to pass on higher costs to cautious downstream customers. While the €700-per-tonne threshold is widely seen as the next benchmark for Northern Europe, most participants believe it will take additional time – and possibly tighter supply – before that level becomes firmly established in transactions.

WSD Take.
WSD forecasts the HRC price in February-March at €660-680/t NW Europe EXW, with a gradual increase to €760-780/t by June-July. For most suppliers, current prices are sufficient to continue imports into the EU. In particular, the DDP-CFR spread for Turkiye and India covers the expected CBAM payments.

As key import sources exhaust their quotas, Q1 imports may contract by 10-15% y/y. In Q2, import volumes could remain unchanged year-over-year. The new TRQ regime, with quota volumes 42% below 2025 import levels, is expected to support rising EU market prices. This, in turn, will mitigate the CBAM impact and expand the geography of imports.

EU domestic steelmaking margins fell in January to €142/t of HRC, below the 2017-2019 average of €180/t. Current margin levels are insufficient to drive the necessary production increase in March-April, which is currently under negotiation. The reduction of import quotas from July is expected to lead to supply shortages, should EU steelmakers adopt a wait-and-see stance rather than significantly ramping up output. In this case the break-even price for importing HRC exceeding quota limits is estimated at €800/t, which will serve as a key price benchmark.

Click here to sign up today for a free three-month trial to receive all the articles in the Industry News service along with our monthly Forecast Reports.