ArcelorMittal has raised prices for long steel products in Europe by a further €20 per tonne. The decision covers products including merchant bar, reinforcing steel and wire rod and represents the company’s second price increase in two months. In July, the steel producer raised prices by another €25 per tonne, bringing the total increase since the beginning of the summer to €45 per tonne.
The decision was driven primarily by rising gas and electricity costs. Industry publication Kallanish reported the development, citing market sources, according to GMK Centre.
The increase is adding further financial pressure to Europe’s steel industry, which is already struggling with weak demand, high production costs and uncertainty surrounding the industrial outlook.
Electricity costs reach critical levels
Geopolitical instability in the Middle East has contributed to sharp price movements in the European energy market. Rising electricity prices have had particularly severe consequences for steelworks using electric arc furnaces.
Electric arc furnaces are widely used to melt steel scrap and produce new steel. The process can generate lower carbon emissions than conventional blast furnace production, particularly when the electricity comes from fossil-free energy sources. However, it also makes production costs highly sensitive to changes in electricity prices.
According to market participants, electricity costs have now reached critical levels for several European producers. Steelmakers are effectively faced with a choice between passing the higher costs on to customers or significantly reducing production over the coming months.
ArcelorMittal’s previous increase of €25 per tonne was reportedly insufficient to cover the rise in production costs. The latest adjustment could therefore be followed by similar announcements from other European producers of long steel products.
Weak market limits scope for price increases
The price increase is being introduced while demand in the European market remains subdued. The summer holiday period and unusually high temperatures have reduced business activity and slowed several construction projects.
Trading in reinforcing steel and wire rod remains sluggish in both northern and southern Europe. Buyers are cautious and are waiting for clearer signals regarding energy prices, construction activity and European industrial production.
Steelmakers are therefore attempting to raise prices in a market where their ability to pass higher costs on to customers is limited. If demand remains weak, producers may be forced to cut output to reduce supply and avoid further losses.
Surging energy costs force new steel price increase
Steel scrap prices, an important cost factor for electric arc furnace producers, remained relatively stable during August. Energy costs, rather than raw material prices, are therefore the main reason for the latest increase.
Market participants are hoping for a recovery in September as the holiday season ends and construction and industrial companies return to more normal levels of activity. Uncertainty remains high, however, and it is not yet clear whether stronger demand will be sufficient for the market to accept the new price levels.
Production declined in the first half
ArcelorMittal’s weaker production figures also illustrate the pressure facing the market. The group produced 27.6 million tonnes of steel during the first half of 2026, a decline of 5.5 per cent compared with the same period in 2025.
Steel product shipments totalled 26.2 million tonnes between January and June, down 4.3 per cent year on year.
The lower output reflects a combination of weak demand and more cautious capacity utilisation. If energy prices continue to rise, European steelworks could introduce further production restrictions.
The development may ultimately affect the construction sector, engineering companies and other major steel consumers. Reinforcing steel is used extensively in buildings and infrastructure, while wire rod is a basic material for products including wire, mesh, screws and other processed steel goods.
ArcelorMittal’s decision could consequently set the direction for the wider European market. If other producers follow, broader price increases for long steel products are expected during the autumn.
The actual scale of those increases will depend on whether demand recovers or whether European steelmakers are instead forced to reduce production.
Source: GMK Centre, based on information from industry publication Kallanish.
