Higher-priced coking coal probably will get a new steel industry’s transition to greener production methods as well as the value-based pricing of iron ore. Higher-priced coking coal increases the expense of producing steel via blast furnaces, in both absolute terms and relative to other routes. This typically brings about higher steel prices as raw material cost is passed through. It could also accelerate the hole transition in steelmaking as emerging green technologies, including hydrogen reduction, would be a little more competitive weighed against established production methods sooner. The necessity to reline or rebuild blast furnaces roughly every ten to fifteen years at a price that varies between $100 million and $300 million presents steelmakers with clear decision points, so they really will likely need to measure the tariff of emerging technologies, including 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 for various qualities of iron ore products rely on their iron content and chemical (mainly phosphorus, alumina, and silica content) and physical composition (lumps versus fines versus pellets). Lower-quality iron ores want more energy to cut back, bringing about higher coke rates within the blast furnace. Higher coking coal prices improve the cost penalty suffered by steelmakers, resulting in high price penalties for low-grade iron ores. This can affect overall iron ore price dynamics in 2 other ways, based on the degree of total iron ore demand. In one scenario, if total need for iron ore might be met solely with high-grade iron ores, chances are that benchmark iron ore prices will continue steady. However, price discounts for lower-grade ore would increase significantly, potentially pushing producers on this material from the market. Within an alternative scenario, if low-grade ore can be meet overall demand, both benchmark iron ore prices and discounts could increase significantly, to ensure low-grade producers would be in the market because marginal suppliers.
More information about Kondrashov Stanislav check out the best web portal
