Low demand in steel manufacturing sparked by high energy costs and uncertain economic outlook weighs on hot rolled coil prices.
- Sep 10, 2022, 2:00 PM CDT
Last week, offers from mills in Northern Europe were €800 per metric tonne exw for October rolling. This figure represents a decline of almost 6% from the €850 offered in early August. However, as one trader noted, transactions are more likely to occur at closer to €750 . Of course, higher energy prices are predominantly due to ongoing Russian gas-supply concerns. As Europe enters winter, it becomes more unlikely that flat-rolled products will stay at these levels. “It doesn’t make sense for them to lower prices,” the source added.Information from Trading Economics showed that Benchmark, Dutch TTF gas was €214.66 per kilowatt hour on Sept. 2. These numbers are a 36.7% drop from the €339.20 seen last week.
High prices and weak demand are causing major disruptions to steel manufacturing and other metals production. On Sept. 2, ArcelorMittal announced plans to indefinitely shut down one of the blast furnaces at its Bremen works. The company hopes to make the move by the end of September. The group also plans to shut down the DRI plant in Hamburg around the same time.
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