EU steel section prices jump to record high levels

European domestic steel section prices jumped significantly on week March 9 as mills held back offers amid high costs and supply constraints.

S&P Global Commodity Insights’ Platts European medium sections price, category one, S235 JR, was assessed at Eur1,250/mt delivered March 9, up Eur145 on week, reaching the highest level on record since the index began in January 1998.

Sources noted that the ongoing crisis between Russia and Ukraine greatly disrupted the supply chain in the market, pushing prices up to record high levels.

“A lot of mills have stopped offers,” one distributor source in the Benelux region said, adding that issues related to scrap and energy costs were affecting production processes.

“There is a lot of speculation in the market,” the same distributor said. “Gas and electricity prices doubled in one day yesterday. There are also problems from scrap and other raw materials which the European mills were buying from Ukraine and Russia.”

The source also noted that around 40% of the country’s requirements came from Russia, but the developing situation in the crisis region was creating a lot of volatility in oil and gas prices. However, he expected that long steel product prices would return to normal in the near term and put current workable levels for medium sections at Eur1,250/mt-Eur1,300/mt delivered. “Some mills are only offering these prices from stock, because this week and the next, a lot of mills will still be out of the market,” he added.

One European mill source also highlighted high energy and scrap costs, and told S&P Global that he was currently withholding offers.

“Many mills, including ourselves, are still out of market,” he said, adding that current prices for category one medium sections were around Eur1,300/mt delivered. “There are actually no mills offering right now, these prices are just a reference,” he said. “Mills are out because of energy costs and high scrap. All these costs are just going crazy. Very few deals are happening at the market because…demand is low.”

Elsewhere, Northwest European domestic rebar prices also strengthened significantly on week March 9 as mills held back offers. The Platts TSI Northwest Europe Rebar increased Eur70 to Eur920/mt ex-works on week March 9.

One seller sold said that the rebar business was at a standstill. “No price level, no business — everything has stopped,” he said, as a lot of mills had stopped offering products in the domestic Northwest European market. The source noted that one mill was heard offering rebar in coils at Eur1,200/mt delivered, which would make indicative standard rebar offers around Eur1,160/mt-Eur1,180/mt delivered, depending on the mill.

“We are hearing Eur900/mt price levels for rebars with potentially higher prices, but a lot of mills are out of market at the moment,” one trading source said.

— Rabia Arif, Staff