The Italian coil market has been split into two camps: buyers of imported HRC, and those who stayed away because of uncertainty over the final cost of importing, including financing, CBAM, and the risk of incurring duties, Kallanish hears.
Market sources had expected Turkish hot rolled coil to oversubscribe its EU fourth-quarter tariff-rate quota (TRQ) on the opening day, 1 October.
Many Italian buyers kept importing until September. However, one source from the cautious camp believes import and CBAM costs have been underestimated. In his view, the idea that CBAM will cost only €30/tonne ($33.7/t) on material from the least polluting producers is unrealistic.
Other cautious buyers say they have not imported any material in recent months, apart from small ddp volumes. “The complexity of the system introduced by the European Commission leaves many questions unanswered,” one comments.
Two large buyers and service centre sources say they have imported very little HRC and are turning to European producers instead.
The “non-buyers” argue that only material loaded on vessels this year can be booked in 2026 accounts. Anything loaded in 2027 will go into next year’s accounts.
“At the end of the year when we actually know how much import will cost in total, we will be able to understand if it is worth it and I think there will be surprises. I do not think it is financially viable anymore,” one buyer says.
All sources had expected material from some origins to exceed set quotas. Some 90,000 tonnes of Turkish HRC will now either stay in storage at ports or pay the applicable duty.
Another source who has not imported material says that even at €570/t cfr, Turkish material ends up too expensive once all costs are included. It comes close to European prices, with far more hassle.
Financing and storage costs for keeping material at port for three to six months, until quotas reset, are heavy. CBAM costs are uncertain and depend on the producer, ranging from €30-40/t to around €100/t. And if quotas are exceeded, which sources see as certain, clearing material through customs could become extremely costly. A buyer notes that material left at port for months starts to rust.
Some buyers who kept importing had little choice. Their large requirements forced them to take the risk. Some European service centres who bought imports confirm they did so to diversify their supply.
Service centres and re-rollers remain squeezed between high prices upstream and unreliable demand downstream.
Sheet and tube prices are expected to rise again in November as HRC prices climb. For December, HRC is seen reaching €800/t base delivered, with cold rolled and hot dip galvanized coil at €900/t.
This time, producers are seen as reasonable in their increases. “They are gradually going up, not exaggerating,” a source says.
With HRC at €750/t base delivered on average and sheet at €820/t delivered, service centres are not making margins. They expect sales volumes to stay subdued, with no sign of a recovery in downstream demand. Late payments are now common in some countries, including Italy and France.
No HRC purchases have been made for 2027 yet, and producers are not quoting for next year.
