French longs transaction prices have moved higher since early March as mills implement increases following the escalation of the US-Iran conflict, Kallanish notes.
After an initial pause, with buyers adopting a wait-and-see stance, order intake increased soon after the conflict and price rises have been at least partially accepted.
Buyers and distributors report average increases of €20-30/tonne ($23.02-34.53/t) compared to pre-conflict levels. Activity has improved across the value chain, though without signs of panic buying. Apparent demand has returned modestly, with buyers securing volumes and expecting further increases.
A large buyer and a distributor in both northern and southern France, as well as a large European steelmaker, expect further increases, potentially in April, depending on how the conflict evolves.
However, one source notes that real demand has not improved and warns that excessive price hikes could stall activity.
Demand picked up sharply in the days following the outbreak of the war but appears to be easing again this week.
Across the value chain, logistics costs are rising due to higher fuel prices, while energy costs and modest scrap increases in March are also supporting increased prices.
Scrap merchants expect material values to rise again in April, as suppliers in France, Belgium and Germany face the same cost pressures, although it remains too early to confirm. One source adds that the recent uptick in apparent demand is increasing scrap requirements by mills, which could lead to price increases for the raw material.
For the first time, European producers seem to be putting up a united front on price increases. Spanish longs producers active in France, along with Italian rebar suppliers present in the south, are also pushing up prices. Lower-priced import offers from either origin are not currently available. ArcelorMittal is also implementing significant increases across rebar and other long products.
First-category section prices are now moving towards €780/t delivered, with European suppliers, including Spanish mills, targeting around €800/t delivered into France. Rebar is rising to approximately €640-650/t delivered with more orders throughout the value chain. Merchant bar prices are also increasing, up from €240–250/t last month to €260–270/t delivered, with other European producers maintaining firm positions on further hikes.
