The European HRC market will slow down in the summer; prices will remain at the same level, despite the increase in supply
The European hot-rolled price index remained stable on Tuesday, July 29, with the market entering a quiet summer period; however, market participants disagreed about the post-summer outlook, despite the recently announced price increase, Fastmarkets understands.
There has been a seasonal decline in trading in Europe, with market sources expecting to see little change in the coming weeks due to the holiday season.
During the week leading up to July 25, the largest European factories increased their offer prices in October-delivery of HRC €590 per tonne on a free-of-charge or shipping basis, but buyers remained mostly skeptical about the chances of those offers being sealed in offers, citing low demand.
Supplier sources, meanwhile, reported a surge in requests for the HRC on Tuesday, with delivery dates reaching into the fourth quarter of 2025 and the first quarter of 2026.
Despite housing prices on Tuesday, supplier sources said they had "satisfactory" order books and hoped to achieve even higher prices in the fourth quarter due to restocking activity, lack of imports and tighter domestic supplies.
According to one supplier, the potential for a rebound in HRC prices will be driven by the introduction of the Carbon Boundary Adjustment Mechanism (CBAM), which is expected to increase the cost of the imported coil, along with the introduction of new trade measures to replace current protective measures. As a result, they said, many buyers will be looking to secure the European HRC for the end of 2025 and 2026 early.
This trend was confirmed by several small and medium-sized buyers in the region, who told Fastmarkets they had stopped ordering coils abroad due to concerns about the impact of CBAM and existing protective measures.
"Milling cutters are counting on trade measures and below, the availability of coils to support the uptrend, but the reality is that demand is still lagging supply and consumption is not growing," a shareholder in Germany told Fastmarkets.
The buyer's ideas about the product level were included in the amount of about 550-560 per ton of Ex-work.
But one buyer's source said the bid of €550 per ton of ex-work was rejected by mills in the Benelux region.
"Buyers are constantly saying that they won't pay anything above 550-560 euros ex-works, but there are no actual deals[being done]at such levels now," the source told Stan.
Fastmarkets daily calculation by Yulia Bolotova
Fastmarkets.com