Steel prices can move noticeably in a short time. On the buying side this is often read as "the seller raised the price arbitrarily", yet the price rests largely on measurable items.
This article sets out the main items behind the price and what to look at when comparing quotations. The aim is not to forecast, but to show how the price is built.
The five main items
| Raw material | Scrap, iron ore and billet — the largest single share |
|---|---|
| Energy | Electricity and natural gas; decisive in electric arc furnace production |
| Capacity and demand | How full the mills are; construction and industrial demand |
| Freight and logistics | Sea freight, inland transport, port and storage |
| Currency and finance | Exchange rate, payment terms and the cost of money |
Raw material: scrap or ore
The production route changes how the price behaves. Electric arc furnaces melt scrap and pass movements in the scrap price on to the product quickly. Integrated plants work with ore and coal; there the price moves more slowly but in wider waves.
In Türkiye, billet and rebar prices are closely tied to imported scrap prices. A movement in scrap finds its way into product prices within a few weeks.
Energy and production cost
Steelmaking is energy intensive. Changes in electricity and gas prices feed directly into cost, particularly in rolling mills and galvanising lines.
In galvanised and pre-painted products the coating adds its own cost: the zinc price and the coating class can noticeably separate the prices of two sheets of the same size.
Demand, capacity and season
The construction season, public projects and industrial investment set demand. When demand rises and capacity is full, lead times stretch and prices move up; in destocking periods the opposite happens.
Regional differences matter too: proximity to a port, competition from imports and export demand can create different prices for the same product in different regions.
What to check in a quotation
- Which unit is the price in (tonne, metre, piece), and is it theoretical or actual weight?
- Are the grade and standard written down (e.g. S235JR, DX51D, B500C)?
- Are coating class, tolerance and surface condition stated?
- Who pays for delivery, and is the Incoterms rule named?
- How long is the price valid and what are the payment terms?
