HRC markets in both the US and Europe are being reshaped by trade policy. The European Union's new steel import quota regime, effective July 2026, is expected to tighten the European market by reducing the volume of third-country steel entering the region. European HRC prices have already rallied by over EUR 100/t since October 2025 to approximately EUR 700-705/t in anticipation of this regime change.
US HRC prices remain supported by Section 232 tariffs (25% on most countries) and a US domestic industry that has maintained production discipline. The US Commerce Department's June 30 tariff review on semi-finished steel could further tighten the market if additional duties are imposed on Mexican and Brazilian slab imports.
The World Steel Association's Short Range Outlook projects global steel demand will bottom out in 2025 and rebound modestly by 1.3% in 2026 to reach 1,773 million tonnes. The rebound is driven by public infrastructure investments in the US (IIJA), Europe (Green Deal), and India's rapid industrialization.
Key demand growth drivers include India (+9% over 2025-26), developing economies, and the long-awaited return of steel demand growth in Europe (+3.2% in 2026). However, Chinese steel demand remains subdued as the property sector continues to contract, partially offsetting growth elsewhere.
European HRC prices could push toward EUR 750-800/t post-July if the quota regime is implemented without exemptions. However, weak real demand in construction and automotive remains the principal constraint on how aggressively mills can push prices higher. The US market faces similar dynamics with infrastructure supporting prices but manufacturing remaining cautious.
HRC prices are entering a structurally tighter phase driven by trade policy. US buyers should watch the June 30 tariff review closely: any escalation favors locking in domestic supply. European buyers should secure Q3 volumes before the July quota regime is implemented. The risk-reward favors fixed-price contracts for H2 2026.