PHILADELPHIA North American steel producers operating electric-arc furnaces (EFs) are losing market share due to higher ferrous scrap prices and increased competition from blast furnace operators, according to chief executive officer of Evraz Inc. North America Michael Rehwinkel.
Blast furnace operators have benefited from lower prices for iron ore pellets and coking coal, which in turn have reduced their production costs for making liquid steel, Rehwinkel told delegates at AMMs Sixth Annual Steel Scrap Conference Monday.
"The variable cost per ton of liquid steel is $444 per ton for EF-based producers and $388 per ton for blast furnace producers," Rehwinkel said. "The ability for EF producers to pass on higher scrap prices is limited, as theyre competing with lower-cost steel from blast furnace producers and against lower-priced imports, especially for tube and pipe."
Unless ferrous scrap prices come down, Rehwinkel said, the market will be forced to source steel from cheaper blast furnace operators.
A version of this article was first published by AMM sister publication Steel First.