Import prices of HRC from the EU are decreasing, but consumer appetite is limited
Import prices for hot-rolled steel products to Europe declined on July 9, as sources pointed to increased competition amid low domestic prices and associated risks related to precautionary measures, low demand and CBAM, which limit demand for imported material.
The mood in the flat-rolled market. There was a mostly negative effect on prices and demand characteristics, as fundamental factors remained unchanged amid the summer lull, with an increasing number of sources slowing down operations in the run-up to the holidays throughout the value chain.
A source at the Northern European service center pointed to further uncertainty regarding the direction of prices, citing high competition between factories, as well as some others, continue to insist on filling out order books for the late summer period. "Some factories are still trying to get good orders, so they refuse offers, it's very competitive," the source said. "We have heard offers from mills for 540-550 euros per ton[ex-works Ruhr], while others are offering 580 euros per ton, but now they are very wide."
A source at the mill acknowledged that there were lower offers on the market, but still insists that they were not universal across the market. "They have to fill the order books for the summer period, but it's kind of crazy to go down to such a level, even when there is no workload, which leads to the conclusion that some factories are really experiencing difficulties, but we are not going to go down to such a level," said the source, who also shared expectations about the recovery. prices in September.
A Southern European source summarized the competitiveness of the current market conditions, saying that the market "is a struggle, and there is not enough demand for everyone."
When discussing the import market, market participants remained focused on the upcoming CBAM legislation, divided between its potential to provide support but the short-term risk of additional protective duties and the diminishing difference with domestic HRC prices. Although some market participants suggested that imports could increase significantly before 2026, as many are trying to avoid the mandatory carbon reporting requirements associated with CBAM legislation, others were skeptical about this due to the current unfavorable market conditions.
"CBAM will increase pressure on the market, but it is very difficult to import and it is risky now," said an Italian trader.
A source at the Northern European service center said: "It is difficult to estimate the price, and it may not be easy to import materials at a good level, since the difference