The steel cost rollercoaster: Sharp altitude swings in a deep fog
Cost swings in the steel industry since 2011, when WSD began its monthly World Cost Curve information system, have been sizable and frequent. For the median-cost Chinese and non-Chinese steelmaker, the operating cost to produce hot-rolled band, including plant overhead expense, have been as follows:
• In December 2015, the figures for the Chinese median-cost mill were $354 per tonne for operating cost, $302 for marginal cost and a difference of $54 per tonne between the two. For the non-Chinese steel mill, the figures were $372, $308 and $64 per tonne, respectively.
• In March 2017, WSD’s World Cost Curve data estimates that the median-cost Chinese steel mill had a HRB operating cost of about $473 per tonne and a marginal cost of $414 per tonne; or, $59 per tonne less for the marginal cost. The figures for the non-Chinese median-cost mill were $472 per tonne, $403 per tonne and $69 per tonne, respectively.
• By October 2017, WSD expects that global steelmaking cost will decline versus March 2017 levels given decreases in prices for iron ore, coking coal and steel scrap. WSD estimates that median cost for Chinese steelmakers will be $286 per tonne and the median cost for non-Chinese mills will be $355 per tonne.
This report includes forward-looking statements that are based on current expectations about future events and are subject to uncertainties and factors relating to operations and the business environment, all of which are difficult to predict. Although we believe that the expectations reflected in our forward-looking statements are reasonable, they can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties, including among other things, changes in prices, shifts in demand, variations in supply, movements in international currency, developments in technology, actions by governments and/or other factors.
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