The European longs market has been moving erraticly in H2 2021, with prices in North Europe lately stabilising and some upward trends reported in Italy after a softening period. As 2022 approaches all eyes are now on energy and natural gas costs, considered by steelmakers high enough to justify a further increase for longs.
A source at a large steelmaker in Europe noted that demand and high input costs will force EAF steelmakers to lift longs prices further going into Q1 2022.
“We calculated that energy and natural gas costs for an EAF on 10 December were up by €200/t compared with Q1 2021,” the source said to Kallanish. “In mid November the increase was of €115/t compared with Q1 2021, but prices have continued to increase during the last month.”
The demand forecast for long products in Europe remains good as the construction sector is performing well across the continent and a further recovery is expected in 2022. In its latest forecast Euroconstruct said 2022 construction activity in Europe should increase a further 3.6% y-o-y in 2022.
“Since the end of the summer EAF-based mills have been applying selective hourly stoppages when the price of the energy reaches its peaks. If the price of finished longs does not increase further we expect the supply to be reduced further,” the source added. “Observing the forward prices for energy we can say without a doubt that in Q1 2022 costs of energy will continue to rise, forcing the steel market to accept new increases.”
Emanuele Norsa Italy
