ArcelorMittal puts out fresh contract prices for industry customers

Steelmaker ArcelorMittal Europe has issued new contract prices to industry customers with hot-rolled coil contract prices at Eur1,080/mt and hot-dipped galvanized at Eur1,220/mt across Europe, sources told S&P Global Platts Oct. 28.

According to sources close to the company confirming the new contract prices for quarterly and longer contracts, the prices are not for automotive customers but rather for industry customers such as distributors.

An ArcelorMittal spokesperson would not comment on the company’s steel pricing.

Order books for other end-users such as the mechanical engineering or white goods industries have been strong, and one European mill source said some rerollers had already received firm bookings into 2023.

Automotive demand still unclear

The question over automotive demand and the level of volumes being booked by carmakers struggling with production disruption is, however, still looming over the steel market. Contract negotiations are ongoing for the automotive industry.

Earlier this month, a Southern European automotive manufacturer and a European mill were heard to have finalized a long-term HDG contract for Eur1,250/mt — Eur50-100/mt lower than what mills were initially attempting to conclude.

Other mills were heard to be proposing even higher contract prices, between Eur1,300-1,400/mt, for HDG material.

Because of the ongoing semiconductor and chip shortage, the European automotive sector has endured ongoing production disruption, with some auto manufacturers relinquishing previously agreed-upon volumes back to mills, prompting a surge of HDG availability.

“A lot depends on the semiconductor issue,” a German trader told Platts. “If car manufacturers must continue with reduced volumes, it‘ll impact auto steel needs and prices. If the issue can be solved and car manufacturers restart full steam, steel demand and prices will go up strongly again, especially for green steel in the years to come.”

There is also no change in current spot price levels for flat steel from European mills yet as attention is focused on contract negotiations that are currently above spot level prices.

Spot prices remain at current levels

A German distributor said discounts were now available for spot transactions and said automotive contract negotiations were likely to conclude in November. Market participants were expecting higher spot prices in Q1 on the back of prolific gas and electric surcharges from mills, and elevated raw material costs.

The mill source said that the delta between longer term contracts and spot prices “have never been higher,” but that the first positive signs can be seen in Southern Europe where customers start to accept higher prices. The Made in Steel industry fair in Milan, Italy, earlier in October, and the Blechexpo fair in Stuttgart, Germany, this week, have boosted sentiment across the industry but have not resulted in higher spot prices in Europe — yet.

The daily Platts HRC assessment dropped Eur170/mt since its all-time high at Eur1190/mt EXW Ruhr June 25 this year. The Italian HRC assessment fell Eur228/mt since its record peak at Eur1145/mt EXW Italy June 10 this year.

— Laura Varriale, Amanda Flint