ArcelorMittal raises EU HRC offer by €30/t

Luxembourg-based steelmaker ArcelorMittal is implementing a price increase of €30/t across Europe, pinning its hot-rolled coils (HRCs) offer at €510/t ex-works in Germany and €490/t ex-works in Italy, effective for October deliveries.

This is the third time this year that the mill has attempted to raise prices — the previous two attempts were mostly unsuccessful, but higher iron ore costs following the Brumadinho dam disaster in Brazil in January have squeezed mills' margins for most of this year.

The previous price increase had put the seller's offer in Germany above €530/t ex works.

European producers were hit particularly hard because demand from the key automotive industry has fallen and CO2 costs have risen. And an influx of imports has pushed local prices further down.

A slight improvement in the order books and an expectation that steel demand will normalise in the fourth quarter, in addition to the EU's steel safeguards revisions last week, imply that more mills could try raising prices.

But market participants are sceptical as to whether customers will accept this, pointing to declining import offers from Turkish and Indian sellers and sustained low demand for flat products in Europe. In addition, the pressure on iron ore prices has alleviated, with the Argus ICX 62pc seaborne fines at $88.45/dmt cfr Qingdao yesterday, compared with $116.55/dmt on the same basis on 1 August.

source: Argus Media