The prices of rolled steel products in Europe began to recover in the week before October 17, helped by a combination of a revival in demand and the effects of new protective measures proposed by the European Commission, which will limit imports into the EU.
Distributors who have been avoiding restocking over the past few months have returned to the market to book the required volumes. This allowed the steel companies to replenish their order portfolios and gave them grounds to demand higher prices for rolled products.
"Major distributors have returned to replenish stocks after several months of inactivity, so the order portfolios at the factories are now full. We no longer need to chase volumes, and now we can focus on higher prices," said the steel producer.
In Italy, deals were reported for large quantities of rolled steel at prices ranging from 590 to 600 euros per ton from the factory. Such prices were unaffordable for average buyers – they paid 610-630 euros per ton from the factory.
Since Italian distributors already have limited rental volumes in December, they aimed to get prices for January at around 650 euros per ton from the factory. And suppliers are in no hurry to conclude deals for the first quarter, as they expect further price increases.
"The rolling mills[in Italy]began to demand 40-50 euros more per ton of sheet. I think this will be achieved in the next few weeks with the support of the upcoming carbon boundary adjustment mechanism[CBAM]and new steel import quotas," the trader said.
The European Commission published its proposal for new protective measures for steel on October 7. McCloskey estimates that the annual volume of imports of heavy plate category 7 products will decrease by about 63% due to the new supply and the existing system of protective measures.
Market participants expressed concern that imports are too risky until the final version of the new protective measures regulation is available. Several sources expect that the measures may come into force in January next year.
The introduction of CBAM from 2026, combined with the lack of guidance from EU authorities that would allow importers to estimate the amount of duties, is expected to deter buyers from importing early next year and lead to lower domestic prices.
European distributors need to raise the prices of sheet metal to cover the higher slab costs due to CBAM.
It was reported that the import offers for slabs from China and Vietnam amount to about 520-530 dollars per ton compared to Italy, while market participants estimate achievable prices at about 500-510 US dollars per ton.
