Surging European steel prices are set to extend their gains as Russia's invasion of Ukraine has disrupted logistics, spurred sanctions and sent energy prices soaring.
Russia is the world's fifth biggest steel producer, while Ukraine comes in at 14th. The two combined account for a fifth of imports to the European Union.
European hot rolled coil (HRC) prices have shot up by nearly 40% over the past three weeks. Prices in North America and China have also gained, but by much less, around 7-8%.
"It's certainly looking like prices will continue to rise in the short term. We're forecasting that prices will jump again by the end of this month and into April," said analyst Kaye Ayub at consultancy MEPS International.
"The supply side has been massively disrupted in Europe, and that will take quite a while to resolve."
Russia and Ukraine punch above their weight in the global steel market due to hefty exports, especially to Europe.
"In Europe, pricing power is clearly still with the steel mills... as the loss of about 20% of finished steel imports from Russia/Ukraine tightens the market," UBS analyst Andrew Jones said in a note.
Even though Western nations have not specifically targeted Russian steel companies with sanctions, logistics problems and the knock-on impact of sanctions have disrupted businesses and shipments.
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