ArcelorMittal overhaul of production will not have a significant impact on the price of rolled metal

European traders and distributors are currently unsure whether the latest announcement from ArcelorMittal to cut production by 3 million tonnes per year at European rolling mills could affect prices.

Coil price indices hit their lowest levels since the third quarter of 2016 as demand struggles and mills vigorously compete for volume. This decline occurred despite the fact that import offers have so far remained above domestic prices for most of the year.

“In theory, after the announcement of ArcelorMittal, prices should jump from domestic factories by at least € 20 per tonne ($ 22.39 /tonne), but the market is still depressed and we continue to hear that factories in Europe are selling HRC at € 450 /ton on the basis of the plant and € 540 /ton CRC ”, - comments the Spanish trader.

On the other hand, but emphasizes that European mills, as a first step, should stop lowering prices every week.

Currently, Turkey remains the most competitive source of imports, but its prices are pegged at 460 € /t compared to southern Europe and higher, which is slightly higher than domestic supply. Indian factories remain uncompetitive, while Russian suppliers send more competitive offers for rolled metal products to Antwerp.

Another trader notes that if ArcelorMittal adheres to the program to reduce steel production, then the prices for plate products should rise. However, he notes that the move could well have been made mainly to exert political pressure on the European Commission as the review of EU security measures on steel imports approaches.