The new prices were effective immediately and the company has been offering its long steel products across Europe at the higher levels. But, according to industry sources, the increased prices have not yet been accepted in deals.
The main reason behind the decision to increase the offer prices was the high production costs, according to market sources.
ArcelorMittal tried to increase its prices for long steel products across Europe at the beginning of June.
But due to slow demand from the construction sector, the main consumer of long steel products, prices in Northern Europe have been gradually declining since the start of June.
For example, Fastmarkets’ weekly price assessment for steel reinforcing bar (rebar) domestic, delivered Northern Europe, averaged €635 per tonne for the 7 days from June 1 to June 7, compared to €622.50 per tonne for the period from July 13 to July 19.
A price rebound has also not been observed also in Northern Europe’s mesh-quality wire rod market, Fastmarkets’ data shows.
According to Fastmarkets’ weekly price assessment for steel wire rod (mesh quality), domestic, delivered Northern Europe, the price for this product was stable at a weekly average level of €632.50 per tonne since the end of May.
European long steel producers hope that the new steel safeguard measures of the European Commission, effective from July 1, would have a positive effect on prices.
Notably, the European Commission approved a 15% cap per country on residual quotas for steel wire rod initially available for each quarter. The measure would impact imports from destinations like Algeria, Egypt, Malaysia, Indonesia, and India, which usually give the most competitive prices.
Thus, each country falling under the “other countries” category will be limited to delivering no more than 70,850 tonnes of wire rod to the EU in one year, Fastmarkets understands.
However, according to industry source, European buyers are still keen to book from these destinations due to the price gap with domestic prices.
