Transport cost estimation service - coal, iron ore, steel

We have just launched a new service for estimating commodity transport costs around the world [for scrap cargo, iron ore, coal, steel etc]. For further info, visit http://www.steelonthenet.com/freight.html

 

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Questions for steel industry planners

Steel is generally thought of as a capital intensive industry. Here are some questions then for your strategic planning department … [which should be working hard to maximise return on capital employed].

- Which type of zinc galvanising line is preferred nowadays, and why?

- What the main technological alternative to tandem mill cold rolling?

- What causes per-tonne plate mill costs to vary up to 5-fold?

- Why do heavy section and rail rolling mills vary by up to 2½ -fold in capital cost per tonne terms?

- Is there a significant capital cost difference between coal-fired and natural gas based DRI plants?

- What is the main determinant of capex costs per tonne in a hot or cold rolling mill?

- How can I reduce my capital costs in electric steelmaking?

- What is the main driver of capex cost per tonne in a seamless tube mill?

- Are capital costs different for commodity and high performance steels – and why?

- Is it common to have partners involved in financing mill construction – do you have any examples?

- For which main elements of a steel plant do capital investment costs generally not vary with steel volume?

Full answers available in MCI’s steel industry capex report, published October / November 2010.

blogger@steelonthenet.com

Steelmaking energy costs

For those steelmakers not watching their energy prices, here is a quick reminder of the changes in recent months.

Looking at steam coal prices [and we use the Australian Port Kembla f.o.b. thermal coal cost benchmark] these costs have risen from ~$72/tonne last summer to $193/t today, which is a 168% rise.

Looking at gas prices [and we use Russian natural gas as our cost benchmark, based on the German border price] these costs have risen from $280 per 1000 m3 last summer to $517 per 1000 m3 today, which is an 85% cost increase.

For regular monthly updates on these prices, visit www.steelonthenet.com/commodity_prices.html.

blogger@steelonthenet.com

Steelmaking costs 2008

With all the talk of the impending 2008 iron ore price increase, industry observers might be forgiven for taking their eye off other steelmaking costs. But ferrous scrap prices also rocketed in January [see http://www.steelonthenet.com/commodity_prices.html], rising a massive $90/tonne to ~$385-$400 fob Rotterdam for HMS1. Just to add to the misery, natural gas prices also jumped 20% in January [http://www.steelonthenet.com/commodity_prices.html], to reach record levels ...

Anyone betting on a 2008 steel price fall ?

blogger@steelonthenet.com

2008 steelmaking costs rise steeply

As discussions centre on crude oil prices hitting $100 a barrel this week, steel portal www.steelonthenet.com has recalculated current steelmaking costs with the latest inputs prices for scrap, electricity, coal etc.

Even before the expected 2008 price increase for iron ore, steelmaking costs for a typical West European steelmaker have risen some 35-40% in the 12 months since January 2007. Electric arc furnace steelmaking currently costs approx $447 per tonne of liquid steel. BOF steelmaking currently costs $353 per tonne. The figures compare to costs of $321 and $262 respectively exactly one year ago.

The summary cost calculations behind the current figures are shown online at www.steelonthenet.com/steel_cost_eaf.html and www.steelonthenet.com/steel_cost_bof.html. Interestingly, the cost differential between BOF and electric steelmaking has swung towards integrated steelmaking, which is now $94/tonne cheaper [at liquid steel level] than scrap-based steelmaking.

It remains to be seen how this differential will be affected by the current round of negotiations about 2008 iron ore prices. The expected iron ore price rises seem very likely to push mid-2008 BOF steelmaking costs towards $400/tonne liquid steel, and EAF steelmaking towards $500/t meaning that these costs will more than 50% above end-2006 price levels.

It certainly seems like a good time to be selling scrap ...

blogger@steelonthenet.com