Some Italian mills are considering implementing an energy surcharge on top of their finished product prices. This is in line with other European steelmakers who are mulling similar surcharges due to the rising costs of gas and electricity, Kallanish learns from market sources.

Although details have yet to be decided, the surcharges should be between €200/tonne ($199) and €300/t, depending on mill and product, applicable from September and October. The application methods however are still unclear.

If the Italian government does not intervene to cap energy prices, many mills in Italy will be forced to stop production. This is the case for some long steel producers in other European countries such as France and Spain. Customers say they may not be able to pay the latest price increases on all products, plus an energy surcharge, unless size extras or base prices decrease.

Some long steelmakers in Italy are currently idling their plants while others are working at reduced capacity in order to save on their energy bills.

In Germany, meanwhile, ArcelorMittal will shut down one of two blast furnaces at its Bremen plant, as well the direct reduced iron unit at its Hamburg steelworks in the fourth quarter due to skyrocketing energy prices (see separate story).