Steel prices in Europe soared last week as the Russia-Ukraine conflict threatened exports from the two major producing nations.
Benchmark prices surged 22% last week to 1,160 euros ($1,257) a ton, the highest since August, according to data from Kallanish Commodities Ltd. Steel is one of several raw materials booming as the war jeopardizes supplies from the two commodity producing heavyweights.
A number of steel producers in Ukraine -- including ArcelorMittal SA and Metinvest Holding LLC -- have been forced to idle their plants due to the war. The nation is normally among the top five exporters of steel into the European Union, and disruption to its supplies will tighten the already strained market there.
Russian steel firms are facing their own difficulties exporting to the bloc. Severstal PJSC suspended sales to Europe, its biggest export market, after billionaire owner Alexei Mordashov was sanctioned by Western nations, along with other tycoons in the country.
Higher prices for the metal will cause more pain for manufacturers and construction firms, who endured a rally to record levels last year. The market could get even tighter if rising energy prices cause further production curtailments by European steelmakers.
