FOCUS: Steel mills seek higher prices on energy cost rise; some to review pricing mechanisms

Significantly rising energy prices have forced European steelmakers to look for ways to compensate for surging production costs, but mills lack a unified approach to the problem; some are introducing energy surcharges while others prefer to focus on raising the price of steel, sources told Fastmarkets on the sidelines of the Made in Steel 2021 trade fair in Milan, Italy.

In October, prices for gas increased three-fold and electricity costs increased nearly four-fold, a mill source estimated.
“The cost of the recent gas and electricity price rise will be about €100 per tonne of steel,” a mill source in Southern Europe told Fastmarkets.
Possible support from regional governments
Italian authorities have discussed the possibility of supporting energy-intensive industries, market participants said. Some sources also claimed that other member states of the European Union are likely to consider similar steps.
The Italian government might reduce energy tax rates for all businesses in the country, a distributor source said.
Some market participants, however, believe that such policy might be seen as subsidizing. This might also harm already tense negotiations between the EU and US authorities regarding Section 232 review.

Earlier this month, United States mills stressed the need to maintain Section 232 against the EU because steel producers in Canada and the...

Published

Maria Tanatar

Julia Bolotova

October 06, 2021

16:23 GMT

Milan