Crude steel production costs for electric arc furnaces are set to end the current year, on average, at below the production costs of blast furnace mills in Italy, according to the latest calculation made by Siderweb.
The production cost calculation takes into consideration all variable costs including raw materials, energy and other costs.
In 2021, the calculation indicated that the production cost of one tonne of steel at EAF mills equalled €594.98, against €563.04/t for integrated mills using the blast furnace route, Kallanish notes.
The trend has reversed this year despite scrap prices holding firmer than iron ore; coke costs have meanwhile doubled on average. As a result, production cost for one tonne of steel in an EAF is predicted by Siderweb to be on average this year at €681.28, while BF cost is at €778.25/t.
Going into 2023, Siderweb expects BF production costs to continue being elevated, though, in general, input costs will decline. EAF production costs are set to be, on average, at €603.39/t next year and BF costs at €666.23/t. According to Siderweb, in 2023, the differential will be at €63/t, below the differential of almost €100/t in 2022.
All raw material prices are set to decline in 2023, together with electricity and gas costs. Iron ore costs for Italian mills are set to be on average at €100.50/t in 2023, down from over €116/t in 2022. Meanwhile, scrap costs are set to be at €325.05/t, down from some €367/t in 2022.
Emanuele Norsa Italy
