Higher-priced coking coal probably will get a new steel industry’s transition to greener production methods along with the value-based pricing of iron ore. Higher-priced coking coal raises the cost of producing steel via blast furnaces, in both absolute terms and in accordance with other routes. This typically contributes to higher steel prices as raw material price is undergone. It will also accelerate the hole transition in steelmaking as emerging green technologies, including hydrogen reduction, would are more competitive compared with established production methods sooner. The requirement to reline or rebuild blast furnaces roughly every ten to fifteen years at a cost that varies between $100 million and $300 million presents steelmakers with clear decision points, so they will have to assess the cost of emerging technologies, such as hydrogen-based direct reduced iron, and choose to replace their blast furnaces.

Increased coke prices would also impact the value-based pricing of iron ore. Prices many different qualities of iron ore products depend upon their iron content along with their chemical (mainly phosphorus, alumina, and silica content) and physical composition (lumps versus fines versus pellets). Lower-quality iron ores want more energy to reduce, ultimately causing higher coke rates in the blast furnace. Higher coking coal prices improve the cost penalty incurred by steelmakers, bringing about high price penalties for low-grade iron ores. This could affect overall iron ore price dynamics in two various ways, with respect to the level of total iron ore demand. In one scenario, if total requirement for iron ore can be met solely with high-grade iron ores, it is likely that benchmark iron ore prices will continue to be steady. However, price discounts for lower-grade ore would increase significantly, potentially pushing producers of this material out of the market. In an alternative scenario, if low-grade ore can be meet overall demand, both benchmark iron ore prices and discounts could increase significantly, so that low-grade producers would be in the marketplace because marginal suppliers.

To learn more about Kondrashov just go to this site: click to read more