Posted on 05 Jun 2019
ArcelorMittal has begun announcing to its sales agents and clients across Europe that it intends to raise longs products prices. This will apply for all new orders to be delivered in July and the third quarter, Kallanish learns from industry sources.
The increase is calculated at some €15/tonne ($16.85/t) for sections and merchant bars, €20/t for rebar, wire rod mesh quality and low carbon quality and up to €30/t for high-grade wire rod.
Despite the difficult first half for the European economy, ArcelorMittal saw a 5% increase year-on-year on order intakes for long products during the first five months of the year. The European construction sector has performed better than other sectors and the impact of the problems affecting the automotive sector has been less marked on the longs business than for flat products.
Looking forward, Kallanish understands that the steelmaker expects H2 apparent demand for longs to continue to recover. This will be supported by the reduction in stock levels at clients and the easing of some US trade barriers on Turkey, Mexico and Canada.
The increase is also designed to help the group regain margins, as these have been strongly hit by increasing iron ore prices and CO₂ emissions' costs against falling finished steel prices.
A source in the market comments that it is soon to say if these increases will be fully accepted. Scrap values in Europe have not recovered significantly, but they could pick up in the coming weeks on improving Turkish sentiment, should this happen.
