Miners must share risk with steel mills: McKinsey analyst

Oct 13, 2011 | 12:31 PM | Anne Riley

Tags  World Steel Association, Sigurd Mareels, McKinsey, steel, Anne Riley

PARIS — Steelmakers’ margins are coming under increasing pressure as a result of high and volatile raw material costs, creating the need for a more even distribution of risk ownership along the supply chain, said Sigurd Mareels, director at management consulting firm McKinsey & Co.

Raw material costs have spiked to between $400 and $600 per tonne of steel produced in today’s high-priced marketplace from about $80 to $100 per tonne previously, resulting in a significant squeeze on margins and exposing mills to new levels of risk, Mareels said Thursday at the World Steel Association’s annual conference in Paris.....

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