Spanish EAF-based mills are currently calculating that the spike in electrodes' prices as well as other input costs is impacting the cost of producing billet from scrap by €40-50/t ($47.2-59.0/t), Kallanish learns from sources.

Electrode prices have jumped since the second quarter of this year due to the scarcity of availability in the market, a move that is impacting EAF-based steelmakers globally (see Kallanish passim).

A source at a major EAF-based steelmaker in Spain confirms that the added cost is in the range of €40-50/t. While some of the increase has been passed on to clients in the prices of long products, further price increases are set to be witnessed in the coming months, the source adds.

Meanwhile an executive from Celsa confirmed in a presentation at this week’s IREPAS conference that the company calculates the additional cost at €40/t. During the summer the steelmaker announced a €9/t surcharge for the increase in input costs for its products, but this surcharge is set to rise further.

As reported, rebar prices in Spain are now sold at some €480/t delivered and this level is not expected to decrease significantly, despite the correction in scrap prices seen since mid-September.

In Spain over 65% of crude steel is produced using the EAF route, according to Unesid, the local steelmakers' association. In 2016  the country produced13.6 million tonnes of crude steel.