Steel processors in the EU doubt the sustainability of price increases
The sharp rise in the cost of rolls and the prospect of supply shortages in the coming months are expected to put serious pressure on the European manufacturing segment. Several sources warn that the loss of competitiveness reported to the European Commission by industry associations is close to being realized.
The prices of derivative rolled materials in Italy are rising, but still lag behind the rising prices of rolled materials in Europe, prompting resellers to take advantage of the pipe and wire fair that took place last week to raise prices.
One of the Spanish coil sellers told Kallanish after the exhibition that customers are reporting market stagnation, while demand has almost stopped this month and activity is generally sluggish.
Italian distributors and service centers describe an increasingly complex market. Steel companies, on the one hand, clearly benefit from CBAM and quotas, while the processing sector, on the other hand, is struggling to cope with rising raw material costs.
One large service center believes that the prospect of using extremely expensive hot-rolled coils is a serious concern. The participants of the exhibition in Dusseldorf agreed that prices would rise to about 770 euros per ton (905.70 US dollars per ton) in the coming weeks, although no increase was announced at the exhibition itself.
With the new protective measures due to take effect this summer in conjunction with CBAM, imports are expected to become increasingly difficult, leaving supplies from Europe as the only viable alternative for most market participants. Several sources expect the prices requested by HRC to rise by about 100 euros per ton from current levels as July approaches.
The market is expected to run out of inventory by then, as import purchases have been used up in recent months, and it will not have a cheaper alternative to expensive coils from the EU.
Despite the difficult geopolitical situation, the new protective measures will be fully implemented, which will significantly reduce quotas. "This will be a blow to all steel companies," says a source at a major service center.
He adds that companies that currently import must specify default CBAM values in their annual financial statements, as supplier certification for emissions will only be available in September, meaning that it will not be possible to certify suppliers until the first quarter of 2027.
Large purchasers continue to come from the import market, albeit with significant risk. They also absorb most of the available