• Home
• Foundries
• Suppliers
• Newsletter
  • Content / Conditions
  • FAQ - Frequently Asked Questions
• Business Opportunities
  • Buy (Wanted)
  • For Sale
• Job Market
  • JOB OFFERS (vacancies)
  • RESUME
• News
• Technical Papers
• Events, Fairs, Courses, Training
• Forum

USEFUL LINKS

• Universities
• Associations, Institutes, Reseach Centers.
• Norms and Standards
• Quotations / Prices
• Other Links

Foundry Gate

• About Us
• Advertisement
• CONTACT US

Iron ore's costs in making steel in Europe have increased progressively in the past year and outpaced met coal costs further.

Despite low steel demand, iron ore relative costs to metallurgical coal in European steel making have exceeded the last peak in July 2019, according to S&P Global Platts analysis.

Iron ore prices in Europe have seen support from contracts linked to China's import spot fines prices, which have surged to $118/dry mt CFR China this week, even with lower contract pellet and lump premiums.

A basket of iron ore products including fines, lump and pellets needed to produce a ton of pig iron reached $178/dmt CFR Rotterdam basis in July, while input costs for met coke were just over $60/mt CFR Rotterdam basis.

This left a spread of almost $118/mt in favor of iron ore, and a pig iron cost of around $238.50/mt.

In July 2019, while the basket of iron ore prices to produce a ton of pig iron was higher at $209/dmt CFR Rotterdam, the spread with met coal was $115.50/mt.

Pig iron costs exceeded $300/mt a year ago, while steel prices were higher and stronger capacity utilization in Europe kept overall costs down.

Platts estimated European HRC steel mill spread with raw materials in July continued to track close to the 2020 low seen in June.

Regional mills are searching for lower iron ore prices and higher steel prices to move back into firmer operating metrics.

Austrian steel group Voestalpine on Aug. 5 noted high Chinese steel production during the first half of the year while other economies were cutting industrial production due to the COVID-19 pandemic.

This kept iron ore prices higher relative to coking coal and other commodities, which helped mitigate iron ore costs on the steel business, Voestalpine said in a quarterly report.

The European steel group does not publish steel capacity utilization rates in Europe, while companies operating in the region have suggested rates have fallen sharply since March, and remain below 2019.

In the US, crude steel capability rates were just below 59% at the end of July, based on American Iron & Steel Institute data.