European domestic HRC market maintains downward trajectory; import prices aggressive
Hot-rolled coil prices in Europe continued to drift lower on Monday June 30 amid sluggish demand and ongoing pressure from imports.
Fastmarkets’ calculation of the daily steel HRC index domestic, exw Northern Europe was €557.67 ($653.36) per tonne on Monday, down from €565.63 per tonne on Friday June 27.
Deals for small and medium tonnages were reported to have been done within the wide range of €540-570 per tonne ex-works.
Unconfirmed sales of large tonnages were heard as low as €515-530 per tonne ex-works by several sources.
Compared with Northern Europe, business in the domestic market of Italy was minimal.
Sources said that mills in the country would accept €530-540 per tonne ex-works in the case of bookings, while last week this level was said to be possible for large volumes mainly.
Fastmarkets’ daily steel HRC index domestic, exw Italy was calculated at €535.00 per tonne on Monday, down from €540.42 per tonne on Friday.
The lower domestic prices were attributed to the fact that foreign suppliers, particularly from Indonesia are behaving very aggressively.
Information came to light about 30,000 tonnes of Indonesian coil being sold at €460 per tonne CFR Italy at the end of last week. This is when offers ranged €470-480 per tonne CFR.
India-origin material was available for customers in Italy at €520 per tonne CFR, while the most recent reports of offers from Turkey came at €500-520 per tonne CFR including duty, depending on the size of the cargo.
(The ninth paragraph of this report initially stated there were two cargoes of Indonesian coil sold. This has been corrected to reflect only one cargo reported.)
All ADI BFs at risk of closure
All blast furnaces (BFs) at flat steel producer Acciaierie d’Italia (ADI) could face closure in July, pending an anticipated ruling by the Italian authorities, Minister of Enterprise and Made in Italy, Adolfo Urso told trade unions on 27 June.
The statement came just one month after Urso outlined a two-step plan to relaunch ADI.
The Extraordinary Commissioners of ADI said that the schedule of the mill’s restart plan needs to be reviewed due to technical issues, the steelmaker said on 26 June.
“After years of complaints about the disastrous state of the plants and the failure to renew the environmental authorization, which expired two years ago and was subsequently extended, Minister Urso told us that without a new authorization and without a program agreement in July, the Milan court might decide to shut down ex-Ilva [currently known as ADI],” Italian trade unions UILM and UIL said in their joint statement dated 27 June.
The unions have called for a new industrial plan to resume ADI operations and to protect jobs.
“There is an issue we cannot ignore: there is a pending sentence of the Court of Milan which, if political decisions are not taken on the interinstitutional level, the environmental authorization issue will decide the fate of the plant,” the FIM-CISL trade union said. “The environmental authorization – which takes into account the environmental impacts – requires replacement [of BFs] with [direct-reduced iron] DRI modules fuelled by gas. To obtain this production cycle, it is essential to manage the gas supply through a [new] regasification hub in the port of Taranto.”
An Azerbaijani consortium led by Baku Steel – selected as the preferred bidder for ADI’s assets in March, and market sources said that the company was planning to use liquid gas to power the plant.
Issues with the restart of BF No. 2 has a major impact on the relaunch plans. When the furnace had to be stopped it was loaded with a large volume of pig iron and due to extreme temperature the BF could not be emptied at the time. The pig iron removal process started in December last year and ended in March 2025.
Due to complex works following the stoppage, additional technical issues at BF No. 2 remained unnoticed and which caused the initial emergency equipment shutdown. As the restart of the furnace could pose a threat to both workers’ safety and other operations at the mill, the decision was made not to resume operation at BF No. 2, while the mill made efforts to arrange a safe relaunch of the equipment.
In May this year, BF No. 1 had to be closed due to technical issues, and the restart timeline remains unclear, the mill said.
Local authorities seized BF No. 1 in early May following a fire and explosion at ADI.
ADI’s only operating furnace – BF No.4 was scheduled for relining that will take 2-3 months. The mill has four more furnaces which are currently not producing.
Uneven national implementation risks undermining EU state aid framework, metal markets warn
The European Commission launched the CISAF on June 25. This is a new state instrument intended to support the EU’s Clean Industrial Deal, focusing on decarbonizing industry and enhancing its competitiveness.
CISAF replaces the Temporary Crisis and Transition Framework, and enables EU member states to grant aid for clean energy, industrial decarbonization, and clean-tech development. It will be in effect until 2030.
Key support areas include: rapid roll-out of renewables and low-carbon fuels (such as hydrogen); temporary electricity-cost relief for energy-intensive users tied to decarbonization investments; incentives across diverse decarbonization technologies; expansion of clean-tech manufacturing including critical raw materials; and public-private de risking through equity, loans or guarantees.
Steel
European steel distributors’ association Eurometal has repeatedly flagged the “critical” challenge of high energy costs for Europe’s steel industry, on all sides of the supply and value chain of steel products.
“We welcome the European Commission’s new state aid framework as a step in the right direction, particularly in the context of safeguarding Europe’s green industrial base,” EUROMETAL president Alexander Julius told Fastmarkets.
“The new flexibility is helpful, but its effect will be uneven unless member states actively mobilize support plans – and this remains uncertain in many cases, especially for mid-sized market participants in the steel value chain,” he added.
Indeed, access to renewable energy at affordable prices has become a stumbling block for European steel industry decarbonization efforts.
Between 40 million and 50 million tonnes per year of new green steelmaking capacity – using just electric-arc furnaces (EAFs), or EAFs and direct reduced iron (DRI) – is expected to come online in Europe over 2025-30, Fastmarkets’ research team has estimated.
Currently, about 55% of steel in Europe is produced via the blast furnace-basic oxygen furnace (BF-BOF) route, while around 45% of European steel is manufactured using the EAF route. This figure is projected to increase to roughly 57% while the EU transitions to cleaner technologies in pursuit of its net-zero emissions target by 2050.
Moving to the DRI/EAF production route, however, raises concerns in the European market, notably regarding energy efficiency.
While BF-BOFs use 0.05MWh per tonne of steel production, EAFs use 0.45MWh per tonne of steel, a mill source has estimated. This makes EAFs as much as 10 times less energy efficient as BOFs.
“We need sufficient renewable energy at affordable prices to be able to decarbonize,” a second mill source said.
Electricity prices in Europe continue to be much higher than in many other parts of the world. Industrial rates frequently surpass €100 ($106) per MWh, whereas costs in regions such as the US and China are often closer to €30-50 per MWh. This disparity creates a serious competitiveness challenge for energy-intensive sectors such as steel production.
Producer sources have warned that, even taking into account the costs of the EU’s Carbon Border Adjustment Mechanism (CBAM), imports still might be more competitive than Europe-made steel. considering the “enormous” disparity in electricity costs.
European steel association Eurofer, meanwhile, said that it was too early to comment on the CISAF and its effect on markets.
“[CISAF] is an extremely complex piece of legislation which requires an in-depth assessment together with our members to fully understand the effect it will have on the sector. Therefore we are still examining it,” Eurofer’s spokesperson told Fastmarkets on June 26.
Silicon
Other metal production is also deeply affected by energy cost inputs. Silicon metal’s uses extend from silicone chemicals in white goods, to high-purity polysilicon for solar panels and semiconductors, and it is particularly heavily affected by energy costs.
The EU imposes an anti-dumping duty on silicon metal imports from China, but even after that duty, market participants tell Fastmarkets that China-origin material trades in the EU at prices not economically viable for European producers.
“Silicon metal is highly energy-intensive, with electricity prices being a major cost driver, often accounting for a significant share of total production costs,” Fastmarkets analyst Emre Uzun said. “In that sense, European producers are particularly sensitive to energy prices, whereas in the US and China, the effect is lessened due to the greater availability of low-cost energy.”
In the silicon market, there was also concern about uneven state aid. One long-time silicon market trader predicted that larger, wealthier countries would be able to be vastly more generous with their subsidies than smaller countries, contributing to a less balanced market.
And in silicon, poor conditions in the market could undermine the supply-side support measure.
“The effect will be very small,” the silico trader said. “Because of the general situation in the market, there is [heavily reduced] consumption in Europe.”