[SMM EU Weekly Review] ADI Outage Widens North-South Divide; Quota Reset and Melt & Pour Rules Loom

Published: Sep 28, 2026 17:16 (GMT+8)

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Last week, the EU HRC market exhibited a pronounced North-South divergence. Northwest Europe (NWE) HRC quotes retreated to 734 EUR/tonne EXW, while Italian HRC stood firm at 736 EUR/tonne EXW, directly reflecting stronger price support in the south. On the delivered front, Italian delivered prices surged to 820-830 EUR/tonne, whereas NWE dropped to 780-795 EUR/tonne, highlighting sluggish northern demand against southern resilience. The import market remained extremely thin, with Italian HRC import prices assessed at 690 USD/tonne CIF. Southern European trades centered around Turkish resources at 555-570 EUR/tonne CFR, while Indian offers hovered uncompetitively at 625 EUR/tonne CIF. This massive southern restocking wave was directly driven by ArcelorMittal Italy (ADI) halting its coke ovens and its sole operating blast furnace (BF2, ~2 million tonnes/year capacity) since September 16. On the macro-policy front, October 1 marks two critical nodes: the quarterly quota reset and the formal initiation of the "Melt and Pour" origin evidence obligation. Furthermore, the European Parliament overwhelmingly voted on September 17 to expand CBAM to downstream products like fasteners and wire rod. Looking ahead to next week, if the October quota release exhausts rapidly as seen historically, the import arbitrage window will slam shut, driving domestic prices higher again. Supported by ADI's production cuts and slab restocking, the Italian market is expected to remain firm, whereas NWE will lag due to high service center inventories and sluggish destocking. The region will maintain a strong but regionally divergent posture.

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