Theoretical Mill Cost to Produce Hot Rolled Coil: Debate Continues

With the reset of iron ore and ferrous scrap pricing there is an extraordinary amount of interest in trying to figure out the cost to produce a hot rolled coil at the domestic steel mills. This is a question Steel Market Update is asked on an almost weekly basis. We wrote about the subject recently using the comments from one of the metals and mining analysts. That article prompted a number of comments and questions.

Then last week World Steel Dynamics produced a “Death Spiral Alert” for their clients (WSD Inside Track #138). Buried amongst their comments on a whole host of subjects was an analysis they did regarding the “operating cost to product” a hot band. What World Steel Dynamics was attempting to do was to point out the variance between integrated operational costs versus that of the electric arc furnace (EAF) or mini-mills.

Brett Linton

Brett Linton is a digital operations analyst for Steel Market Update, where he began his career. Linton has been in the steel industry since 2010. He has held roles as a category manager and strategic insights director at Reibus before returning to SMU in 2024. He is a graduate of The University of North Georgia with a degree in Finance and Accounting. Brett can be reached at brett@steelmarketupdate.com or 724-314-0179.