The European hot-rolled coil (HRC) market remained stable earlier this week, while the demand has dropped on market concerns about the impacts caused by new sanctions imposed on Russia and the continued problems of the energy supply and costs.

Although Russia’s semi-finished steel products are not subject to sanctions, the disruption of the supply chain of these products might bring a huge impact on the European HRC market because approximately 3 million tons of EU’s production relies on the supply chain.

Moreover, electric arc furnace steel plants will have no choice but to cut production if the energy costs keep rising. It was expected that steel mills will impose surcharges on the annual contracts.