USA Standard Plate Steel 6 month commodity price chart

While steel commodity prices fluctuate based upon supply and demand, they are also subject to the price of iron ore and coking coal, two commodities used in the manufacturing process of steel. In this time of global financial crisis, the need for steel in the construction of roads, railways, other infrastructure, appliances, and buildings has fallen dramatically.

Other common steel applications in which the commodity is needed include shipbuilding, pipeline transport, mining, offshore construction, aerospace, heavy equipment such as bulldozers, office furniture, and a multitude of tools.

The steel commodities market is paying more attention to iron ore and coking coal prices after recent changes to pricing mechanisms in the industry. Earlier in 2010, the 40-year-old traditional pricing system for both commodities, based on annual price rates and lengthy negotiations, collapsed.

The replacement system, which is based on shorter-term quarterly contracts that closely track the price of iron ore and coking coal on the spot commodities market, has emerged.

China is by far the world’s largest importer of the steel making commodities, accounting for approximately half of the market, followed by Japan, South Korea and Germany. Demand from those countries has a significant influence on steel commodity prices.