The Hot Rolled Coil (HRC) market in Germany experienced a complex landscape characterized by subdued demand and intense market competition. HRC market sentiment reflected significant challenges, with steel service centers and distributors engaging in fierce competition for market share. The HRC market was primarily influenced by ongoing negotiations between steel mills and automotive original equipment manufacturers (OEMs), creating an atmosphere of cautious anticipation.

In the second week of December, the HRC market in Germany witnessed a marginal price decrease of 0.4% in the spot market. This subtle price movement was underpinned by multiple market factors, including slow trading activity and substantial inventory levels. HRC market participants reported significant reductions in order volumes, with some steel service centers experiencing a substantial decline in end-user orders compared to the previous year's corresponding period.

The German HRC market was characterized by intense competition between mills and distributors. Steel service centers were actively destocking at year-end, creating additional pricing pressures. HRC market sources indicated that some integrated mills were strategically selling materials through their service centers at lower rates, while simultaneously maintaining official offer prices to preserve negotiations with automotive manufacturers.

Long-term contract negotiations emerged as a critical factor influencing the HRC market dynamics. Buyers were seeking substantial discounts, targeting reductions in contract prices, while mills remained resistant to significant price concessions. The automotive sector's contract negotiations were expected to play a pivotal role in determining future HRC market trajectories, with discussions anticipated to continue into the subsequent month.

The import market for HRC remained relatively quiet, primarily due to trade defence measures and uncompetitive pricing structures. European mills maintained their stance on pricing, with offers for first-quarter delivery remaining relatively stable. The market was further complicated by energy price fluctuations, with electricity costs impacting production expenses for electric arc furnace-based steelmakers.

Market participants noted limited restocking activities and weak consumption patterns, contributing to the overall market uncertainty. The HRC market faced challenges from reduced demand across various sectors, particularly in automotive-focused segments. Steel service centers reported significantly lower order volumes compared to the previous year's performance.

As per ChemAnalyst, the HRC market is projected to experience continued volatility in the coming months. Analysts anticipate that market recovery will heavily depend on the outcome of automotive sector negotiations, potential demand improvements post-holiday season, and strategic capacity adjustments by major steel producers. The market is expected to remain cautious, with pricing dynamics influenced by ongoing economic uncertainties and sector-specific challenges.