ArcelorMittal and several other European long steel producers are understood to have suspended sales of rebar, sections and wire rod amid a sharp surge in energy costs, market sources tell Kallanish.
Gas prices have climbed by more than 50% following the Iran-US-Israel conflict escalation, while electricity prices are also expected to continue to rise in line with higher gas values. Steelmakers and scrap suppliers also anticipate sudden increases in logistics costs.
“For now, the market is not panicking, but production costs are rising abruptly. Unless selling prices move up, some mills may have to consider production stoppages,” one source says.
The scale of potential price increases remains unclear as the situation continues to evolve rapidly. Several market participants expect significant hikes. “Energy costs are spiking and no one knows when this will stabilise. The level of uncertainty and volatility is extreme,” another source comments, noting that the daily fluctuations make it difficult to assess the full impact.
Some producers are reported to be cancelling or reviewing orders agreed last week, as market conditions have now radically changed. A third source suggests that in the coming days, steelmakers should give clearer indications on the extent of price increases, but stresses that energy prices need to stabilise before mills can return to the market with quotations.
One participant adds that ArcelorMittal has also suspended its longs quotations for the UK market amid the uncertainty.
