ArcelorMittal is communicating to its customers this week its intention to raise offer prices for new quarterly and half-year quality wire rod contracts by €100/tonne ($109). These are currently being negotiated.
The increase was triggered by the need to restore margins as well as the expectation that apparent demand should improve in the first quarter of 2024. Quality wire rod is mainly produced at blast furnace-based mills, which are currently subject to higher-than-expected iron ore and coking coal prices.
The margin squeeze for this product has been severe enough in recent months to force ArcelorMittal to reduce output at its BF-based mills producing most of its quality wire rod.
Kallanish reported earlier this week that the BF-based ArcelorMittal Zenica long steel plant, in Bosnia, has paused production due to weak market conditions. Production should be restarted at the plant as soon as the market allows it. Similarly, production at ArcelorMittal’s Polish wire rod mill in Sosnowiec is temporary stopped.
“Other steelmakers in Europe are facing the same situation as ArcelorMittal and are making similar production cuts as well as price hikes,” a senior market source commented on Wednesday.
Emanuele Norsa Italy