ArcelorMittal is understood to have resumed quoting this week despite ongoing market volatility and rapidly changing cost conditions, market sources tell Kallanish.
The current environment remains particularly challenging for producers, who are struggling to set prices as their costs continue to change amid geopolitical uncertainty.
European buyers and longs producers note that energy prices have nearly doubled over the past week, while scrap values in Western Europe are also increasing. Following the escalation of the conflict in the Middle East, logistics costs are also under pressure.
Like several other European steelmakers, the market leader suspended sales last week while assessing the impact of the rising production costs. According to one source, customers are now waiting for new offers and, in order to avoid disrupting the supply chain, the company has decided to resume quoting. However, offers are reportedly valid only for a limited timeframe of one to two days, allowing the producer to regularly reassess the market situation.
Buyers confirm that the steelmaker is seeking price increases of around €70/tonne ($81.48/t) for its commodity grade longs products, including wire rod, rebar and sections, and about €120/t for high-carbon wire rod.
Other European mills are also implementing similar hikes. In Italy, rebar producers are seeking increases of €70/t after suspending sales last week, while other EU producers are lifting prices for sections and merchant bar by around €40-50/t.
One source believes the conflict is unlikely to end in the short term, suggesting production costs may continue to rise. Another European mill source expects demand to improve in the second quarter following a slow first quarter. Producers throughout Europe report a higher order intake for longs since last week as buyers secure material amid the uncertain outlook.
Meanwhile, a number of northwestern European mills appear to have returned with new price offers which are valid for one day only. ArcelorMittal and British Steel are said to have sent official announcements to their customers in the UK, with hikes of £50/t ($67/t) and £60/t, respectively.
