European hot rolled coil (HRC) prices have recorded another increase over the past week, with mills continuing to lift their offer levels across the region. However, the market response has remained muted as demand conditions have stayed weak and many buyers have refrained from making firm commitments. Most customers are reported to be placing bids below the €700/mt ex-works level, highlighting the gap between producers’ higher target prices and the purchasing appetite of the market. Meanwhile, market activity in the import segment has remained very slow with only a few offers reported this week.
While offers from leading EU HRC producer ArcelorMittal have been kept at €750/mt delivered or €730/mt ex-works, most local HRC prices from mills in northern Europe, mainly for May delivery, have been estimated at €700-710/mt ex-works, against €685-705/mt ex-works last week. At the same time, according to sources, although trade activity has improved to some extent, customers have been insisting on prices below €700/mt. Thus, the tradable price levels have settled at €685-700/mt ex-works, versus €670-700/mt ex-works last week.
In Italy, offers from mills are estimated at €685/mt ex-works for April delivery, up by €5/mt week on week, and at around €700/mt ex-works for delivery in May, the same as last week. Meanwhile, the tradable price level is estimated at €680-690/mt ex-works, up by €10/mt week on week.
In the meantime, volatility in energy markets has significantly dampened trading activity, with market participants pointing to sharp and unpredictable price movements that have left many buyers reluctant to commit to new deals. Traders note that the war in the Middle East has increased uncertainty across global markets, shifting trading behaviour toward speculation rather than demand-driven transactions. The conflict has also had a noticeable impact on Europe’s energy sector. Gas prices surged significantly in early March and, because steel production and related processes such as hot rolling are highly energy-intensive, higher gas prices are expected to raise operating costs for European mills.
The import market has continued to show little activity, as only a limited number of fresh offers were reported by industry sources. Indicative offer prices for HRC have remained at €525-600/mt CFR, with the lower end of the range corresponding to ex-India HRC offers. Offers for ex-Turkey HRC have been voiced at around €600/mt CFR, duty paid, but excluding CBAM costs, compared to around €560/mt CFR last week. Besides, some offers for ex-Algeria HRC were reported earlier this week at around €620/mt CFR, excluding CBAM, but, according one source, “They aim to increase their offer to $700/mt FOB, which translates to around €605/mt CFR, so offers at the €620/mt CFR level roughly make sense.”
Notably, market sentiment has been dampened by uncertainty regarding the EU’s updated safeguard measures and the allocation of national quotas. In addition, the lack of clarity over the cost implications of CBAM has prompted many buyers to take a wait-and-see approach. Besides, shipping disruptions have added another layer of difficulty. Security concerns in the Middle East have forced numerous vessels transporting goods from Asia to Europe to reroute around southern Africa via the Cape of Good Hope. The longer route has increased transit times by around two weeks, tightening the availability of material for prompt delivery.
$1 = €0.87