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The hot-rolled coil (HRC) market saw an uptick in prices across several regions at the start of 2025, despite ongoing market volatility. Producers in Europe and North America are attempting to raise prices, even with weaker demand, while China faces falling prices due to export challenges and domestic economic uncertainty.
In Europe, HRC prices have increased by 3-5% since the start of the year. As of February 7, 2025, HRC prices in Western Europe (ex-works) have risen by 4.8% from December 27, 2024, reaching €595 per tonne. In Italy, prices have climbed by 3.1% to €582.5 per tonne during the same period. Meanwhile, imported rolled products in Southern Europe (CIF) were priced at €555 per tonne on January 31, reflecting a 0.9% increase from the end of December.
The European market in early 2025 has been characterized by unstable demand and cautious purchasing behavior as producers strive to raise prices. Despite some price increases, uncertainty remains due to weak consumer activity.
At the start of January, the Italian market remained stable post-holidays, but low order levels raised concerns. Service centers and end-users hesitated to place large orders, especially given the weak demand from sectors like automotive and household appliances. However, analysts pointed out that manufacturers were not scaling back production, despite pressure on margins.
By mid-January, annual contract negotiations between factories and large consumers, primarily from the automotive sector, were concluded. These contracts included price reductions of €60-80/t compared to the previous year.
In late January, signs of price increases emerged, with a Northwestern European company announcing a price hike to €620/t ex-works. ArcelorMittal also declared a €30/t increase effective from April. Concurrently, imported products lost competitiveness, largely due to the expected tightening of trade restrictions within the EU.
February saw a slight strengthening of the domestic market, supported by growing demand from sectors like energy and construction. However, low end-user activity, particularly in the automotive industry, posed a challenge. Some market participants warned that without significant demand growth, producers might have to scale back supply.
Looking ahead, further gradual price increases are possible, especially if China’s anticipated stimulus package boosts global steel demand. However, the levels of consumption in Europe and EU steel import policies will remain crucial factors.
In North America, HRC prices also rose by 3% to $685/ton since the beginning of the year. January was marked by market instability, influenced by macroeconomic factors and the new US administration's trade policy. Despite expectations for price increases driven by tariffs, weak demand kept the market uncertain, and producers’ efforts to raise prices were met with limited success.
During January, HRC prices fluctuated between $640 and $690 per tonne, with buyers taking a cautious approach. Transaction volumes in the spot market were lower than usual, as key consumers like car manufacturers and construction companies delayed purchases, waiting for further economic developments. By the end of the month, it became clear that the market was not prepared for a large-scale price increase, leading to a slight correction before prices started to recover.
The market showed some improvement in February. Following the Trump administration’s announcement of new steel tariffs, particularly on Chinese imports, producers such as Nucor began to raise prices gradually. By the second week of February, HRC prices had risen to $660-710/ton, supported by rising scrap prices and limited supply from Canada. Increased buyer activity was also observed, as buyers sought to lock in prices before further changes.
Looking ahead, the second quarter of 2025 is expected to see a more dynamic market. Potential new trade restrictions could boost domestic demand, while signs of economic stabilization, particularly in industrial production, could further drive price increases. The primary challenge will be balancing tariff policy with the market's ability to absorb higher steel prices.
In China, HRC prices have decreased by 0.5% to $480/ton (FOB) since the start of the year, marking the lowest levels since September 2024. The Chinese market has been volatile, caught between weak domestic demand and external macroeconomic pressures. Prices initially fell due to low buyer activity and uncertainty in global markets, with the depreciation of the yuan providing a competitive advantage for Chinese exports but weakening the purchasing power of other Asian countries.
In mid-January, the market showed signs of recovery as quotes increased due to pre-Chinese New Year buying and a rebound in raw material prices. However, domestic demand remained restrained, and exports faced challenges due to foreign buyers' reluctance to accept higher prices.
As the Chinese New Year approached, prices stabilized, and many traders paused their activities. Post-holiday, the market did not show immediate recovery, with sales remaining low and traders hesitant to adjust prices.
Looking forward, demand from the construction sector is expected to recover gradually, but global trade tensions and potential anti-dumping investigations could pose risks to Chinese exports.
