Skyrocketing steel prices

Benchmark rates for hot-rolled coil in northern Europe jumped 10 per cent to €1,435 (US$1,583) a tonne on Friday, according to weekly data from Kallanish Commodities Ltd. Prices for rebar also rose to a fresh all-time high.

Ahead of talks about banning Russian steel, prices were already climbing higher, pushing Jamaica's largest steel supplier, Turkey-based Kaptan Metal, to signal further price increases are coming.

“We need to increase our prices due to shortage of raw materials and due to the high increase in the production costs. Because of the war, all your prices gone up. Because of the war, there is serious energy problem. So the cost of production, if I compare it last year, its gone up 20 per cent to 25 per cent, which is quite high,” Oytun Ozdogan, CEO of Kaptan Metal, told the Jamaica Observer in an exclusive interview. Kaptan Metal is based in Istanbul, Turkey.

“With new bookings [steel prices in the Caribbean] will be going up by US$250 per tonne, which is roughy about 30 per cent,” he added.

When asked about the likely impact of any ban on Russian steel, Ozdogan noted that it “will increase the price more.” Uncertainty still looms over how much more steel prices will increase. However, Ozdogan is clear, “The war between Russia and Ukraine is becoming a serious problem especially on steel item prices and also the cost of production.”

The market was already dealing with the loss of Ukraine's exports, normally the fifth-biggest supplier to Europe. Sky-high energy costs have also disrupted operations at some mills on the continent, curbing supply.