European Steel Coil Market Sees Standoff Despite Price Stabilization and Regulatory Changes

In the European steel coil market, a continued deadlock persisted through the week ending September 25, with buyers maintaining ample inventories, thereby reducing the need for restocking. On the flip side, steelmakers are holding their prices steady, buoyed by underlying factors that suggest a price uptrend in the long-term forecast.

Although distributors possess considerable stock, purchased earlier at more favorable prices, the rebound in stock material prices has lagged behind that of mill-produced steel. The market consensus suggests that real demand remains constant, and it might not be until the close of the year that inventory levels drop sufficiently to necessitate significant restocking.

Trading volumes have remained subdued; however, domestic coil prices have experienced a modest uptick over the week, supported by escalating costs and a decrease in imports due to the introduction of new quotas and the Carbon Border Adjustment Mechanism (CBAM). These new regulations have increased the risks associated with imports, prompting a shift in buyer interest towards European-produced materials.

Despite weak demand, buyers realize they cannot argue for lower prices and will soon face higher costs for coil, according to a service center representative. Production complications at several European steel mills are expected to diminish local supplies and fortify the prevailing bullish market outlook. Notably, ArcelorMittal has scaled back operations at blast furnace 5A in its Eisenhüttenstadt facility in Germany, while Italian manufacturer Arvedi has halted one of its hot rolling mills.

 

Further exacerbating supply concerns, Acciaierie d'Italia (ADI) has initiated shutdowns at its facilities following a decision by the Milan Court of Appeal, mandating the closure of its hot area by October 28th this year. Despite ADI not having surplus volumes for spot market buyers, their existing contract buyers are now compelled to seek alternative sources, potentially elevating demand in the spot market.

Market insiders agree that the combination of reduced availability and regulatory impacts will likely drive domestic steel prices upward.

Current Trends in Northwest Europe's Steel Market

In Northwest Europe, domestic transactions for hot-rolled coil (HRC) were recently noted within the range of EUR 740-760 per ton, ex-works, although steel mills had set their sights on achieving prices between EUR 770-800 per ton, ex-works. Concurrently, import offers have been scarce, largely due to EU regulatory impacts, with some traders quoting prices around EUR 725-735 per ton, delivered duty paid (DDP) to Antwerp. Meanwhile, the availability of cold-rolled coil (CRC) has diminished following a major German steelmaker's announcement of having sold out their 2026 supply. Other manufacturers are now prioritizing either the less expensive HRC or more value-added products such as hot-dipped galvanized coil (HDG). As a result, domestic CRC prices were reported at EUR 860-890 per ton, ex-works, with transactions typically closing at the lower end of this spectrum. Prices for HDG were also discussed, ranging from EUR 830-870 per ton, ex-works in the region, with the majority of sources citing prices within the EUR 840-850 per ton range.

Italian HRC Prices Fluctuate Amid Market Shifts

In Southern Europe, specifically Italy, domestic prices for hot rolled coil (HRC) have been reported to range between EUR 720 to 740 per ton ex-works. Although the complete effects of Arvedi's mill shutdown are still uncertain, there is an anticipation that prices could climb more quickly. The rise in import offers has been influenced by increased costs for ferrous scrap and freight. HRC from Turkey has been offered at approximately EUR 620 per ton CIF, inclusive of anti-dumping duties, while offers from Egypt and South Korea are around EUR 630 per ton CIF. On a delivered duty paid (DDP) basis, materials from Asia and Turkey are priced between EUR 720 and 760 per ton. In response to the decrease in imported HRC availability, Italian buyers have started to compensate by sourcing slab from Asia for rolling within the EU. These imports of semi-finished steel are not subject to regional quotas or anti-dumping duties.

Modest Demand for Green Steel in Key Sectors

The demand for green steel coils remains modest, with market transactions mostly confined to small-scale trial purchases. Interest predominantly stems from the automotive and construction sectors, where the additional cost of low-CO2 steel can be integrated into their overall manufacturing expenses. Trial volumes of green steel have seen premiums typically around EUR150 per tonne. Meanwhile, spot premiums for electric arc furnace (EAF)-produced green hot-rolled coil (HRC) fall within the EUR80-130 per tonne range. Many buyers are focusing on new trade restrictions and ensuring the availability of conventional steel. Demand among distributors for low-CO2 materials continues to be limited, with purchases generally occurring only when an existing end-user order enables the distributor to secure the material on a back-to-back basis.