Final Thoughts

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

John Packard
Read more from John PackardLatest in Final Thoughts

Final Thoughts: Pig iron ‘sideways’
What the word "sideways" means can depend on where you sit on the procurement spectrum.

Final Thoughts: Happy birthday SMU
Steel Market Update is proud to celebrate its 17th birthday this month.

Final Thoughts
We’re in the dog days of summer, and the question is whether the market will improve as lead times stretch into September. Your answer to that question might depend on where you are in the supply chain. And producers, it seems to me, are a lot more optimistic than consumers at the moment.

Final Thoughts
We're less than a month out from Steel Summit 2025. Have you already signed up?

Final Thoughts
A scrap trader looks back fondly at blast furnace steelmaking.