A spike in steel production in China is pushing up commodity prices at a time when Japanese demand is recovering amid a construction boom in the capital. Steel makers tend to transfer the higher material costs to the price of the product.
Spot prices for Australian iron ore, the benchmark, climbed to $ 80 /t in mid-August, hitting a four-month high. Coking coal also exceeded $ 200. Both steel grades were up 40% from their lows set in June.
China is stepping up its steel output, which climbed 10% year-on-year to 74.02 million tonnes in July. After the elimination of illegal and substandard steel production, prices for Chinese steel sheets rose to a five-year high. In an effort to improve production efficiency, blast furnaces are increasingly using high-quality iron ore, competing with Japanese counterparties in procurement.
Japanese electric furnace operators are now buying over 30,000 yen ($ 275) a tonne of scrap metal, up 25% from their low in May. The decline in Chinese exports of semi-finished steel products, used as an alternative to scrap metal, forced operators in Vietnam and South Korea to purchase scrap metal from Japan at high prices. This rise in export prices has led to higher domestic prices for Japanese operators.
Iron ore and coking coal prices are up 40% since June
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Azovpromstal® 21 August 2017 г. 10:17 |
