European producers prepare for higher prices for HRC

In early March, some steel plants in the EU withdrew offers with lower prices for hot-rolled coil, according to the World Steel Dynamics. This indicates preparation for a price increase for consumers.

According to traders, price can increase of at least €20/t. «Psychologically, the market is ready for a price change,» one of them said in a commentary.

The market’s readiness for higher prices for rolled products is explained by consumer optimism against the backdrop of a softening decision by the European Commission. Its president, U. von der Leyen, announced on March 3 an extension of the deadline for the entry into force of new CO2 emission targets for cars. Previously, it was assumed that they would come into force in 2026. Now this has been postponed to 2028. Representatives of the European auto industry welcomed this decision.

Prices for hot-rolled coil in February rose by €10-20/t, reaching €600-605/t EXW in Southern Europe and €600-625/t in Northern Europe. Based on this, VSD predicts that in Q2 the cost of the product will be €620-640/t.

The growth in prices for metallurgical raw materials may push the cost of hot-rolled coil to €640-650/t. However, a more rapid increase in price will be restrained by significant warehouse stocks accumulated in Q1.

Price dynamics will also be influenced by foreign supplies, which are currently not limited by the additional duty. At the beginning of March, import offers for HRC are €550-560/t CIF Italy. This is 7% less than local producers. The availability of cheaper options is holding back their requests. The situation will change if the European Commission introduces trade restrictions on imported steel. The Eurofer Association is actively lobbying for these measures.

As reported, in November 2024, there was uncertainty in the global hot rolled coil market. Despite a slight increase in prices in some regions, low demand and economic instability held back sales activity.

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