HRC trading activity in the European market has remained limited following the holiday season, although there was a brief uptick in transactions leading up to the holiday break. 

Key takeaways:

• HRC market is characterized by persistently weak demand and substantial inventory levels.
• HRC prices in Germany are trending downwards due to its shrinking economy.
• Despite price skepticism, mills report satisfactory booking levels and near full capacity for Q1 deliveries. 

The Hot Rolled Coil (HRC) market in Germany and the broader European regions begins 2025 with a cautious stance, marked by lower prices and subdued trading activity. The persistent weak demand and substantial inventory levels on HRC products create a challenging environment for both buyers and sellers. 

Specifically in Germany, HRC prices have shown a downward trend reflecting broader market sentiment, with a notable decrease of 1% observed in the week ending January 10. This price movement indicates that domestic mills' current offers face scepticism from distributors, who contend that realistic HRC prices should align with the prevailing weak demand conditions. 

Despite this scepticism, mills report satisfactory booking levels and are approaching full capacity for first-quarter deliveries, which creates a contradiction in the market. While manufacturers are attempting to raise HRC price offers, the buyers consider such increases unworkable under current market circumstances.

This cautionary attitude is expected to continue in the short term, according to our analysts. There is potential for modest price adjustments as market participants gauge demand patterns in the coming weeks

Carbon-accounted HRC segment has added additional complexity to the European market dynamics, introducing a wider range of pricing offers based on carbon content. While some competitive options for carbon-accounted HRC have emerged, higher-priced offers for lower-carbon materials have struggled to attract interest beyond niche buyers and specific project requirements.

The import market for HRC products has also been surprisingly quiet, with offers from Indian and Turkish suppliers failing to generate significant interest among European buyers. The marginal price difference between imported and domestic HRC offerings, coupled with longer delivery times, has dampened enthusiasm for international procurement. This situation further contributes to overall market stability, albeit with limited trading volumes. Together, these factors paint a complex picture of the HRC market as it navigates the start of 2025.

The analysts anticipate that any significant upward movement in HRC prices would require a substantial improvement in downstream demand or a meaningful reduction in current inventory levels.