Steel prices above 700 dollars- a few thoughts

摘要

Imagine what will be the price of steel when a Chinese steel milker has to spend as much as 420 dollars per tonne on raw materials alone to produce a tonne of crude steel. The average costs of production of a tonne of H R coils will be nearingi 570 dollars a tonne if not more. This is precisely the reason why one is talking if steel prices will shoot over the 700 dollars a tonne mark in the peak of its seasonal cycle-January end to February, 2008, say. The number will rise if one assumes the spot prices of iron ore continue to maintain the existing premium once the contract prices are raised byabout30 percent for the comingyear.Will this really happen?