Steel inputs: compare metallic yield across furnace routes
Steel producers using different furnace routes face different metallic inputs and energy requirements. Comparing a steel selling price with one raw-material benchmark can conceal yield losses, grade constraints and purchased intermediates. Build a material balance for the actual production route before interpreting a headline metal spread.
Identify the route and the finished output
Worldsteel’s process overview distinguishes ironmaking and steelmaking pathways and shows their raw-material inputs. A blast-furnace and basic-oxygen-furnace route is not the same operating system as an electric-arc furnace using scrap and other metallic feed. An EAF can also use direct-reduced iron or pig iron; the furnace label alone does not specify the recipe.
Define whether output is liquid steel, crude steel, slab or a finished rolled product. A one-tonne comparison needs the same stage. A producer buying slab and rolling it should not be modeled as though it also consumes the upstream ore and fuel used by the slab supplier.
A hypothetical metallic-yield model
Assume a fictional EAF produces 100,000 tonnes of saleable crude steel from 110,000 tonnes of compatible metallic input. The yield is 100,000 / 110,000, approximately 90.91%. At metallic input cost of 300 per tonne, cost is 33 million, or 330 per output tonne.
| Hypothetical yield case | Input tonnes for 100,000 output tonnes | Input cost per output tonne |
|---|---|---|
| 90.91% | 110,000 | 330 |
| 88% | Approximately 113,636 | Approximately 340.91 |
A yield deterioration to 88% raises metallic cost by about 10.91 per output tonne even though the purchase price remains 300. Multiplying the selling price minus scrap price by output would miss this loss of usable metal.
Now assume electricity consumption is 0.45 MWh per output tonne at 80 per MWh. Electricity adds 36 per tonne. With electrode, alloy and other variable costs assumed at 34, the simplified conversion contribution at a sale price of 500 is 500 − 330 − 36 − 34 = 100 per tonne before fixed costs.
Quality can constrain the cheapest recipe
Scrap is not one homogeneous material. Residual elements, contamination and product requirements can limit the share of lower-cost scrap. Buying more expensive clean metallics can improve saleable quality or reduce losses. Treat any assumed recipe change as conditional on actual process and customer requirements.
A lower input price is therefore not automatically a lower cost per acceptable finished tonne. Record the metallic mix, achieved yield, alloy additions, energy and rejected output. If public data combine several furnaces and grades, avoid claiming a precise plant-level spread from a group average.
Separate furnace and rolling performance
Crude steel can become finished steel through casting and rolling losses. Suppose the model’s 100,000 crude tonnes yield 95,000 finished tonnes. Metallic cost per finished tonne is 33 million / 95,000, approximately 347.37, before further conversion costs. Applying the crude-steel denominator to finished-product revenue would understate material intensity.
Review when lower-cost metallic purchasing coincides with weaker yield, when a product mix shifts toward demanding grades, or when purchased slab replaces internal production. Each change modifies the material chain, not merely a generic gross-margin percentage.
The output is a route-specific input-to-saleable-tonne table and a contribution scenario. It does not estimate a company’s emissions without additional process data, determine engineering feasibility or forecast steel prices. Preserve yield and recipe uncertainty alongside the arithmetic.
Inventory timing can disconnect purchased metallic prices from the charge actually consumed by the furnace. A current scrap benchmark may decline while the plant processes material bought earlier at a higher cost. Preserve both the physical recipe and the accounting-cost period, and avoid assigning the entire gap to poor yield. The production balance answers how much input was required; the inventory-cost bridge answers which purchase costs reached the reported period. Neither can replace the other.
FAQ
Does an electric-arc furnace use only scrap?
No. The actual metallic recipe can include other inputs. Verify the producer’s route and grade requirements rather than inferring the mix from the furnace name.
Can ore and scrap benchmarks be compared directly?
Not as interchangeable inputs per finished tonne. Their conversion chains, yields, energy needs and quality constraints differ and require separate material balances.