Domestic European flat steel prices have surged to their highest levels since 2024 as tightening EU trade defences and the full implementation of the Carbon Border Adjustment Mechanism look set to shift traditional import trade flows.

Platts, part of S&P Global Energy, last assessed domestic HRC in Northern Europe at Eur660/mt ex-works Ruhr on Feb. 24, up Eur40 since the start of 2026, and the highest level assessed since April. 2024.

In Southern Europe, domestic HRC was last assessed at Eur655/mt ex-works Italy, up Eur40 since Jan. 1, and the highest level seen since March 2024.

Several market participants have said the CBAM framework has made it difficult to make deals for imported material, with default values for certain countries creating an implied CBAM cost of Eur200-600/mt.

Uncertainty surrounding the CBAM verification process has further hampered activity, leaving some buyers unable to accurately calculate their potential carbon-related liabilities ahead of the first financial payment due in 2027.

“Nobody has the real certified documentation yet so it is a pure risk to order,” one Italy-based trader said. “There is a potential extra Eur600/mt cost for Indonesian material if default values are taken.”

Safeguard regime

At the same time, a revised EU safeguard regime is expected to enter into force on July 1, with draft legislation recently being approved by the Parliament’s INTA trade committee. Key proposed changes include an almost 50% reduction in quota volumes, the introduction of a melt-and-pour origin rule, and an increase in the out-of-quota duty from 25% to 50%.

Market participants have suggested that the proposed trade measures could tighten import availability, which has raised concern among some exporting nations.

The Turkish Steel Exporters’ Union, or CIB, is planning a diplomatic effort to oppose the measures, and has warned that exports to Europe could fall by as much as 65%.

The UK government is also under pressure to respond to the measures, and introduce a similar system to their neighbors.

Bullish sell-side sentiment

Domestic European mills have recently hiked their HRC price targets for second-quarter deliveries by as much as Eur50/mt over the month to Eur750/mt delivered as a result of this regulation and increased raw material costs.

Low levels of real demand from end-user sectors, in particular automotive and construction, are weighing on buyer acceptance of these increases, market sources said, adding that the position of mills remains firm.

“It is interesting because the market is at two levels now with the increases and it remains to be seen where the equilibrium is,” one South European-based mill source said. “There is a 50 euro gap between asking prices and actual workable levels,” he added.

Downstream spread to HRC widens

Downstream products, particularly hot-dipped galvanized steel and cold-rolled coils, have posted sharper gains in 2026 as limited domestic capacity has been unable offset reduced import flows.

“Everyone is careful with imports as nobody can be sure of the CBAM cost and additional restrictions that will probably come in July,” one North Europe-based buyer said. “There is more European sourcing on cold-rolled coil as domestic capacity is limited.”

Cold-rolled coil products from five countries — Turkey, India, Taiwan, Japan and Vietnam — are also currently being investigated in an anti-dumping probe, further dampening buying interest.

As a result, the price differential between HRC and downstream products has widened this year, reflecting tightening supply conditions and strengthening domestic pricing power.

“Cold-rolled and galvanized material comes a lot from imports,” one North European-based service center said. “Domestic producers can’t produce it at such a low price in comparison due to the high energy costs in Europe,” he added.

Platts last assessed domestic CRC in Southern Europe at Eur775/mt ex-works Italy, up Eur50 since the start of the year and the highest level observed since March. 2024. Galvanized material in Southern Europe was assessed at Eur780/mt ex-works Italy, up Eur55 since Jan. 1, and also the highest level seen since March 2024.

Domestic CRC and HDG in Northern Europe were last assessed at Eur770/mt ex-works Ruhr, up Eur50 and Eur35 respectively since Jan. 1. Both levels are the highest levels observed since March. 2024.
Source: Platts