Final Thoughts
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Final Thoughts
Written by John Packard
September 12, 2014
With iron ore approaching $80 per dry metric ton for spot 62% Fe fines in China (according to our Asian iron ore trading source as well as The Steel Index), I asked John Eckstein, retired metallurgist last with Severstal Sparrows Point and one of our Steel 101 instructors, to comment on the changes the price of iron ore has made to produce a slab and hot band. We compared ore at $120/dmt versus ore going to $80/dmt and he came up with the following:
At $120/dmt the cost of the slab is $505 per net ton and the hot band is $535 per net ton.
At $80/dmt the cost of the slab is $451 per net ton and the hot band is $481 per net ton.
If you want to learn more about the steelmaking process (including how commodity prices affect cost and how it is bought and sold) we still have a few seats left at our next (and last one during 2014) Steel 101: Introduction to Steelmaking & Market Fundamentals workshop. The workshop will be held on October 7 & 8, 2014 in Fort Wayne, Indiana and will include a tour of the Steel Dynamics flat rolled steel mill. Cost for the workshop is $2000 per person with discounts of $100 for SMU member companies and another $100 per person for those companies sending more than one person. Details and registration are on our website or you can contact our office at 800-432-3475 (info@SteelMarketUpdate.com).
This should be a very interesting week (or weeks) as AK Steel and Steel Dynamics close on the assets of Severstal North America and absorb their order books into their company. As mentioned in our first article, we do not know how the new management will handle the commercial people other than the moves that were already made at Dearborn. We assume that each company will notify the customer base of each plant what they can expect and who will handle their accounts after they close on the facilities.
From here we wish everyone well and the best of luck.
From our perspective the real story in the coming months will be how will consolidation affect steel supply and pricing?
We would appreciate any comments that you would like to make on the subject. Please send them to me directly at: John@SteelMarketUpdate.com
As always your business is truly appreciated by all of us here at Steel Market Update.
John Packard, Publisher
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John Packard
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Sheet prices didn’t roar back after Labor Day. But steel market news sure came out of the gate strong (or maybe chaotically is the better way to put it). First, the nearly $15-billion proposed sale of U.S. Steel to Nippon Steel exploded into the news. And when I say exploded, I mean that all sides seem to be escalating things now.
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Welcome back from Labor Day, from Steel Summit, and from whatever fun you might have had over the long weekend. Personally, I enjoyed camping with friends and family near Starved Rock. No one starved, there were no major injuries, and we enjoyed the many splendors of Mystical Fire. (Speaking of which, does that have industrial uses? But I digress.)
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I want to say a huge ‘thank you’ from all of us at SMU to all of you (more than 1,500!) who attended Steel Summit this year. We appreciate you taking time out of busy schedules to join us – whether that was up on stage, submitting thoughtful questions, or catching up over a drink and bite to eat. Also, a bit shoutout to everyone at SMU and at CRU who made this event possible. It’s no understatement to say that we have a fantastic team.
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Day one and two of SMU's Steel Summit 2024 are officially in the books. We covered a lot of ground, and the agenda sure did deliver.
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The big show is just about here. SMU Steel Summit will be getting underway on Monday. Where does the networking begin? I’d say at the airport. So don’t forget your business cards. And it can't hurt to wear a company golf shirt.