ArcelorMittal is communicating to its European customers this week its intention to raise long product offers, in order to recover some margin loss due to higher input costs.
According to market sources, the company is increasing offers for commodity-grade products by some €30/tonne ($321) with immediate effect. Longer-term contracts for the second quarter for higher-grade products are being raised by a minimum of €50/t.
The company previously announced its intention to raise longs offers in Europe in mid-January, but that move was not accepted by the market. According to Kallanish indices, rebar prices in both northern Europe and Italy moved down in February, reaching in northern Europe’s case €765/t ex-works base, their lowest level since May 2021.
Sources among European suppliers are now hopeful this new price hike will be accepted, as demand indicators are picking up and increased production costs led by scrap have been well advertised.
One source notes that, at current price levels, European mills are also significantly reducing their output of commodity-grade long products, to avoid selling at below cost. “This first price increase could be followed by new ones if scrap levels continue to recover at the pace they are now,” a source adds.
For the first time since April 2022, rebar prices in northern Europe have returned to below hot rolled coil values, as a consequence of the diverging trend the two products have witnessed since the beginning of this year.
Emanuele Norsa Italy
