European steelmakers fall on fears around demand and rising energy costs on Middle East conflict

Shares in European steelmakers take a hit as the escalating conflict in the Middle East fuels concerns over costs and demand

"Steelmakers have obviously been hit hard by fears around demand and rising energy costs," ODDO BHF says in a note, adding that stainless producers are slightly more sensitive as they have higher needs of gas and electricity

Shares in Acerinox ACX.MC fall around 8% while those of Aperam APAM.AS and Outokumpu OUT1V.HE slump about 7%

ArcelorMittal MT.AS, Salzgitter SZGG.DE and Thyssenkrupp TKAG.DE fall about 6%-7%

SSAB SSABa.ST slides around 5%

"More importantly, the conflict risks undermining the recent uptick in PMI observed in both the US and Europe, to which all players are vulnerable," the note adds

According to a Monday note from Deutsche Bank Research, though direct demand exposure to the Middle East is small for European steelmakers, the main impact will come from rising energy costs and indirect effects on demand