The costs of metallurgical production are growing

Prices for raw materials used to make steel are rising, forcing metallurgists to think about further increasing the price of their products.

Iron ore, the main material used in blast furnaces, rose to a three-month high, while coking coal surpassed the critical price level of $ 100 per tonne. Steel scrap used in electric furnaces continues to show strong price trends.

Iron ore spot prices rose to $ 60 a tonne on Monday, up 25% since the beginning of June. Coking coal briefly rose to $ 103 for the first time in about 16 months.

The sharp increase in investment in fixed assets in China, the world's largest steel producer, during the first half of 2016 was the result of a government program to invest in railways and other infrastructure. With steel product prices rising, China's daily crude steel production set an all-time high in June. China is increasingly importing coking coal, limiting the country's steel production. In China, traders reported building up reserves of iron ore and coking coal.

Goldman Sachs, a US-based financial services company, noted that China's steel product exports are stronger than forecast, which boosted demand for iron ore, pushing up the price of the material in the July-September period by nearly 20% from its earlier period. with a forecast of $ 53.

Prices for scrap iron used to make steel in Japan are currently close to 20,000 yen (about $ 200) per tonne, up 10% since mid-July. While electric arc furnace metallurgists are cutting production due to regular preventive inspections, product prices are currently boosted by a rebound in exports. Nippon Steel & Sumitomo Metal purchased more ferrous scrap in the current July-September period due to the rebound in steel exports.

At the same time, further increases in prices for steelmaking materials are considered unlikely due to the industry's sensitivity to demand trends in China. In addition, the rise in scrap prices in Japan will be limited in light of the yen, according to a trade spokesman.