This step is due to high production costs and the need to restore margins

Global steelmaker ArcelorMittal announces an increase in prices for long products across Europe. The move is driven by high production costs and the need to restore margins, Kallanish reports, citing market sources.

The price increase is expected to be €30/t compared to May contracts for all types of long products.

«Despite the reduced production capacity amid lower steel consumption in Europe, prices are heavily influenced by the high cost of energy and raw materials, such as scrap, which remains expensive. At the same time, demand for products is not as high as in recent years, but still acceptable,” the source said.

The Northern and Southern European long products markets have been hit by lower demand and high production costs. At the same time, producers in Southern Europe are performing better than those in the North and West, which are facing low sales and margins. Last month, all long products producers in Germany, France, Italy and Spain raised prices with mixed results. This month, Italian plants are trying to raise prices again.

Global rebar prices declined in most regions in May. The main factors that led to the negative dynamics are weak demand and sufficiently high supply. The state of the construction industry in most countries is not conducive to positive changes in the long products market.

In Europe, rebar prices fluctuated in different directions in May. In particular, in Northern Europe, quotations for the period May 3-24 fell by €10/t, or 1.5%, to €610-640/t Ex-Works. In Italy, prices increased by 3.5%, or €20/t, to €580-590/t. In the Italian market, producers managed to slightly increase prices amid rising consumer activity after the holidays in late April and early May. In addition, rebar prices were supported by rising scrap prices.