[TheForge] Price of steel & scrap

[Mike]

Recently there was some discussion of the rising price of steel.
There was a an interesting piece in a recent issue der Spiegel (22 mch
04) about this.

In Germany, steel makers decided that the price of German
metallurgical coke was too high and started buying it on the world
market.  Some came from Poland and S. Africa but most of the market
coke came from China.  The German coke makers now had no market for
their product so they closed up their plants and, at least in one
case [1], sold the equipment to Chinese interests.

Fast forward a few years.  Now the Chinese steel industry is ramping
up fast, producing something like half the world's steel.  They need
all the coke they can make so the price of a poorer grade of coke has
soared and the best grade isn't obtainable at all.

A graph shows the price of 12% ash-content coke more or less steady
at US$50/tonne from 2000 to late 2002, then trending upward to US$150
over the next year.  In late 2003, the price turns and goes straight
up to US$450/tonne by January of this year.

Apparently the Ruhr steel industry is leaning on the government to
build (subsidize?) a new coke plant.  The availability of coking coal
is not so tight as that of coke although Germany would still have to
import it.

Huh.  No wonder the price of scrap is going up, too.  You don't need
coke and a blast furnace to process scrap.

FWIW,
- Mike



[1] Two hundred sixty-seven Chinese in work clothes and hard hats
    are carefully dis-assembling what was once the pride of the German
    coal industry: The Dortmund Coke Works.  As recently as three
    years ago, coking coal was processed here into product suitable for
    blast furnaces.

    Each of the 2 to 2.5 million pieces is being numbered, dismounted
    and packed in crates.  By October, what was once the most modern
    coking operation in the world will be stowed in 4500 containers.
    Then it will be shipped to Shandong Province in China where it
    will be reassembled.

-- 
Michael Spencer                  Nova Scotia, Canada       .~. 
                                                           /V\ 
mspencer@tallships.ca                                     /( )\
http://home.tallships.ca/mspencer/                        ^^-^^

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