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The cost support of SPA-C steel prices in 2021

Posted:2021-01-26 14:49:49

Since last year, the prices of smelting raw materials such as iron ore, scrap steel, and coke have risen sharply, resulting in an increase in the production cost of SPA-C steel, which has become an important support factor for the volatility of the SPA-C steel market.

As of mid-January 2021, the cost of common carbon billet excluding tax calculated using current raw materials was 3888 yuan/ton, an increase of 771 yuan/ton or 24.7% from the end of October last year. Under this circumstance, how can the ton price of SPA-C steel fall?

If Biden implements the US$1.9 trillion stimulus plan mainly through the printing of money, due to severe inflation in the future, it is expected that the prices of iron ore, scrap, coke and other smelting raw materials will easily rise and difficult to fall, which will further increase the production and logistics costs of China's steel and finished products. In other words, the cost support of China's SPA-C steel prices will continue to strengthen in 2021.