The European hot-rolled coil (HRC) market remains under pressure due to weak demand, oversupply, and falling prices. At the same time, European Steel Dynamics News Service predicts a possible recovery in the second half of the year.
According to World Steel Dynamics (WSD), HRC prices may test a new low of €570-580/t in the near future. The reasons for this are sluggish demand, fierce competition among producers, and active import offers.
Currently, prices in Northern Europe have fallen to €590-610/t EXW, and in Southern Europe to €570-590/t EXW. Imports from third countries have also become cheaper: offers in Italy have decreased by €20 and are in the range of €480-500/t CIF.
According to market participants, buyer activity remains at a minimum. Customers are avoiding new purchases, expecting further price declines. Service centers in Italy have excess stocks and are purchasing only selectively.
Manufacturers across Europe are lowering prices to fill their order books. However, even aggressive pricing policies are not stimulating new deals.
Another deterrent is the uncertainty surrounding the CBAM mechanism. Most buyers are not ready for over-the-counter contracts due to a lack of clarity in regulation.
Despite this, WSD sees potential for a market turnaround in the fall. Positive factors could include:
- a possible trade settlement between the US and the EU;
- a decline in steel production in China;
- the transfer of CBAM costs to prices in the fourth quarter.
In addition, the European Commission has already introduced a new import monitoring tool to protect the market from price spikes and sudden increases in imports. This could also change the dynamics in the medium term.
