The global Hot Rolled Coil (HRC) market displayed divergent trends in February, with U.S. prices surging, European rates strengthening, and Chinese values holding steady. Market participants witnessed varying dynamics driven by regional factors including trade restrictions, restocking efforts, and fluctuating raw material costs.

Key Takeaways:

• U.S. HRC prices jumped 5% in the third week of February, marking the fourth consecutive weekly increase.
• European HRC market experienced upward momentum with German prices rising by 0.8%
• Chinese HRC prices remained stable amid improved market demand and moderate transactions.
• Supply constraints and import restrictions bolstered prices in Western markets
• Raw material costs showed mixed trends with high iron ore prices but expected declines in coke prices.

In the United States, the HRC market demonstrated remarkable strength as Nucor implemented its fourth consecutive price hike, raising spot prices by $30 per short ton. This contributed to the overall 5% increase observed in the third week of February. Lead times remain at 3-5 weeks while the premium of domestic HRC over imports reached a 12-month high. The significant price differential has made U.S. HRC considerably more expensive than offshore alternatives, reversing the situation from last July when U.S. prices undercut imports.

European HRC markets continued their upward trajectory, with Northern European prices showing improvement and German rates increasing by 0.8%. First-tier suppliers have been offering competitive prices for April and May deliveries, while Italian producers are similarly positioning their HRC offerings attractively. Market participants attribute the strengthening to increased buying activity and trade restrictions on imports. The daily steel HRC index for Northern Europe reflected increases compared to previous day, week, and month measurements.

Meanwhile, Chinese HRC prices-maintained stability throughout February despite improved market demand and moderate transaction volumes. The Chinese market benefited from positive signals following a private enterprise symposium and forecasts of a potential U.S.-China trade agreement, which reduced trade friction risks. While iron ore prices remain elevated due to overseas shipment disruptions, anticipated reductions in coke prices have helped stabilize HRC production costs. Notably, Shanghai's HRC inventory decreased by 2.80% week-over-week, with year-over-year declines of 21.21% based on the Gregorian calendar.

Import offers have remained relatively stable, though international suppliers are projecting lead times extending into the second quarter. This extension increases risks associated with imports as new safeguard measures are expected soon. Turkish and Ukrainian suppliers continue to offer HRC within common price ranges, with potential advantages for larger volume negotiations with Turkish suppliers.

As per ChemAnalyst, the global HRC market outlook remains cautiously optimistic for Q2 2025, though significant regional variations are expected to persist. While U.S. prices may face correction pressures due to the widening domestic import spread, European rates could continue their upward momentum if import restrictions remain in place. The Chinese market is forecasted to experience modest price increases as demand gradually recovers and inventory levels normalize. However, sustainability of these trends hinges on improvements in end-user demand, particularly in construction and automotive sectors, which have shown sluggish performance in recent months.