26/02/10
Global HRC prices outstrip rebar as construction slows
Global HRC prices outstrip rebar as construction slows
London, 10 February (Argus) — Global hot-rolled coil (HRC) prices have risen to
their highest premium to rebar since mid-June 2025, according to Argus data.
Argus' global HRC tracker was at $561.19/t on 9 February, while the global rebar
tracker was at $506.52/t. Hot-rolled prices have been supported by an uptick in
large import markets — particularly the US and Europe — on tariffs and reduced
third-country penetration. Long products are less affected by these measures in
volume terms, at least to the EU, because of smaller import quotas.
Manufacturing expectations and activity have also strengthened somewhat in the
eurozone, supporting flat products. New manufacturing orders in Germany rose by
7.8pc in December compared with the previous month, according to Destatis,
driven by growth in the manufacture of fabricated metal products and machinery
and equipment. Asian HRC prices have ticked up somewhat, supported by firmer
manufacturing and regional demand outside of China. A tight slab market is also
underpinning these increases — Asian HRC and slab export prices are almost at
parity at present, with fob China HRC at $464/t and fob Asia slab at $463/t, and
slab offers increasing week by week. Rebar prices have been under pressure, with
winter constraining construction activity in key markets. In the eurozone, the
construction purchasing managers index (PMI) declined further into contraction
territory in January, dropping to 45.3 from 47.4 in December, according to S&P
Global. In bellwether export market Turkey, exports are trading at an $11/t
discount to HRC, the widest since 12 May 2025. Turkish mills are trimming
domestic prices to stimulate demand, in competition with traders that are
already selling at lower levels. Demand for Turkish material in Europe is muted
because of impending quota changes. Because of the weakness in longs prices,
some producers are reducing output. At least four mills have reduced output in
recent weeks, because of rising scrap costs, building finished product
inventories and softening prices. On the other hand, flat steel producers are
ramping up run rates, at least in the largest import markets, predominantly
because of rising tariff barriers. EU blast furnaces are currently running at
nearly 85pc of capacity, while US electric arc furnace-based mills are at 81pc
of capacity, according to data from Navigate Commodities. Chinese blast furnace
production has been softening, contributing to weakness in raw material prices,
and some traders are anticipating firmer margins for flat steel mills as a
result. The two trackers diverged similarly sharply a year ago, reaching a $58/t
gap by the end of March 2025. Sources suggest that European and Turkish rebar
prices are likely to find some seasonal domestic support, as the construction
season begins — Italian rebar is unlikely to fall to the five-year lows it hit
in summer last year as the carbon border adjustment mechanism (CBAM) makes
imports more expensive. Turkish prices are also likely to pick up around April
as major public housing projects start and as the scrap market is structurally
tighter this year, but prospects for export relief are low due to mounting trade
barriers. One Turkish mill executive said his company was channeling more
material into slab casting currently. By Colin Richardson and Brendan
Kjellberg-Motton Send comments and request more information at
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