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| Hot-rolled coil (HRC) |
A major North European steel mill is considering raising its hot-rolled coil (HRC) offer price from €600/t to €620/t. The proposed hike is driven by robust online sales, reduced import penetration, and a slight increase in apparent demand. However, industry insiders acknowledge that real demand remains stagnant.
Supply Constraints Fuel Price Strength
The mill’s executive attributed the potential price increase to tightening supply conditions anticipated from April 1. These conditions stem from the ongoing EU safeguard review and anti-dumping investigations targeting imports from Egypt, Japan, India, and Vietnam.
“While the distribution market is not fully aligned, we’re seeing momentum with these price increases. Supply constraints, not demand, are driving this strength,” the executive noted.
The safeguard review is expected to significantly impact import volumes. Current estimates suggest HRC imports could decline from over 8 million tonnes to approximately 5 million tonnes annually. Egypt, Japan, India, and Vietnam, which recently accounted for 40-58% of EU imports, may face substantial volume reductions due to potential dumping duties.
Producers Seek Regulatory Adjustments
In discussions with the European Commission, mills have requested an overall quota reset to reflect a 20% demand decline since the safeguard’s inception. Additionally, they are advocating for an end to pro-rata duties on the first day of quota resets and higher duties exceeding the current 25% threshold. Producers also propose extending the 15% cap on imports from "other countries" to downstream coil products, aiming to further limit non-EU competition.
Market Trends and Challenges
Since January 2, the Argus benchmark northwest EU HRC index has risen by €18.75/t, reaching €577/t. Traders are preparing for further price increases as import supply tightens. However, service centers continue to face low end-demand and heightened competition for sheet sales, posing challenges for broader market recovery.
The combination of regulatory measures, import reductions, and supply constraints is expected to support HRC price stability in the near term.
