Effects Of Higher-Priced Coke For The Steel And Iron Ore Market Sectors
Higher-priced coking coal is likely to modify the steel industry’s transition to greener production methods and also the value-based pricing of iron ore. Higher-priced coking coal increases the cost of producing steel via blast furnaces, in absolute terms and in accordance with other routes. This typically results in higher steel prices as raw material costs are passed through. It might also accelerate saving money transition in steelmaking as emerging green technologies, including hydrogen reduction, would be competitive weighed against established production methods sooner. The requirement to reline or rebuild blast furnaces roughly every ten to 15 years at a cost that varies between $100 million and $300 million presents steelmakers with clear decision points, so that they should measure the expense of emerging technologies, such as hydrogen-based direct reduced iron, and select to exchange their blast furnaces.
Increased coke prices would also get a new value-based pricing of iron ore. Prices many different qualities of iron ore products rely on their iron content as well as their chemical (mainly phosphorus, alumina, and silica content) and physical composition (lumps versus fines versus pellets). Lower-quality iron ores want more energy to cut back, ultimately causing higher coke rates from the blast furnace. Higher coking coal prices improve the cost penalty suffered by steelmakers, leading to higher price penalties for low-grade iron ores. This may affect overall iron ore price dynamics by 50 % various ways, with respect to the a higher level total iron ore demand. A single scenario, if total requirement for iron ore may be met solely with high-grade iron ores, it’s likely that benchmark iron ore prices will continue steady. However, price reductions in price for lower-grade ore would increase significantly, potentially pushing producers of the material from the market. Within an alternative scenario, if low-grade ore is needed to meet overall demand, both benchmark iron ore prices and discounts could increase significantly, to ensure low-grade producers would remain in the market since the marginal suppliers.
For more details about Telf AG Kondrashov see this web site: this site