Last month, the spread between Fastmarkets' price assessment for steel slab export, fob main port Brazil
and the price for a basket of raw materials reached its widest since the slab price's inception in early July 2017. This occurred just 13 months after the spread reached its narrowest.
Slab prices have come down a little but remain close to their record high.
This calculation takes into account a rough standard basket for input costs, consisting of high-grade iron ore, coking coal and heavy melting scrap. Industry experts indicated that an average of 1.60 tonnes of iron ore, 600 kg of coal and 100 kg of scrap would be needed to produce each tonne of slab via blast furnace.
Fastmarkets does not assess local scrap prices or coal imports into Brazil, so the basket is comprises coal imports into China and Turkish scrap imports from Europe.
By those parameters, margins...