In the European market, hot-rolled coil (HRC) prices are experiencing a period of stability, despite the aspirations of producers to raise offer prices amid slow demand. Trading activity remains at a standstill, with end-user demand continuing to be weak. Producers are reportedly targeting higher prices in anticipation of upcoming long-term contract negotiations, which are expected to commence in mid-June.
The bullish sentiment among producers has been bolstered by the extension of EU import safeguards for an additional two years and the implementation of a 15% cap on residual quotas for HRC. This regulatory change is anticipated to restrict the supply of competitively priced Asian material. Notably, a steel mill in the Benelux region has increased its spot HRC offer price by €20 per tonne to €650-660 per tonne ex-works.
However, buyers, particularly in Northern Europe, remain skeptical about the room for price increases, citing slow consumption and a downward trend in the raw materials market. Distributors and steel service centers are not accumulating stock, reflecting the cautious approach of the market. Current estimations suggest that the workable price level in Northern Europe lies within the range of €620-640 per tonne ex-works.
The market is closely monitoring the situation, with expectations that producers may introduce new, higher offers. However, the prevailing sentiment indicates that a significant rebound in HRC prices is unlikely in the near term due to the ongoing sluggishness in end-user demand.
