The charge price squeeze (sometimes called the value cost squeeze) is quite a well-known phenomenon to the majority steel industry strategic planners. It is a reality that has been around for several years. It means the long-term trend of falling steel industry product costs, as evidenced by the falling end product prices which are seen as time passes. On this sense - notwithstanding the falling revenue per tonne - it ought to be remembered that the squeeze does conserve the industry by maintaining the value competitiveness of steel against other construction materials such as wood, cement etc. Falling costs. The central assumption behind the squeeze would be that the cost per tonne of a steel product - whether a steel plate or even a hot rolled coil, or a bar or rod product - falls on average (in nominal terms) from year upon year. This assumption of course ignores short-term fluctuations in steel prices (e.g. due to price cycle; or because of changing raw material costs from year upon year), because it describes a long-term trend. Falling prices with time for finished steel items are at complete variance together with the rising prices evident for several consumer products. These falling prices for steel are however brought on by significant adjustments to technology (mostly) that influence steel making production costs. The technological developments include: modifications in melt shop steel making production processes. An incredibly notable change throughout the last 25 years continues to be the switch from open-hearth furnace to basic oxygen furnace and electric-furnace steel making. Open hearth steel making is not just very energy inefficient. Additionally it is painstaking steel making process (with long tap-to-tap times) with relatively low labour productivity. The switch from open hearth furnace to basic oxygen process or electric arc furnace steel making allowed significant steel making cost improvements - and various benefits such as improved steel metallurgy, improved environmental performance etc. This is a good demonstration of a historic step-change in steel making technology having a major impact on production costs. the switch from ingot casting to continuous casting. Here - in addition to significant improvements in productivity - the primary advantage of acquisition of continuous slab, billet or bloom casting would be a yield improvement of ~7.5%, meaning a lot less wastage of steel rolling mill performance improvements when it comes to energy efficiency (e.g. hot charging), reduced breakouts, improved process control etc causing reduced mill conversion costs less set-up waste through computerization, allowing better scheduling and batch size optimization lower inventory costs with adoption of contemporary production planning and control techniques, etc. The list above is designed to be indicative rather than exhaustive - however it illustrates that technology-driven improvements have allowed steel making unit production costs to fall as time passes for many different reasons. In the years ahead, the implicit expectation is that costs is constantly fall as new technological developments [e.g. involving robotics, or near net shape casting] allow. Falling prices. The reference to the term price inside the phrase price range squeeze arises because of the assumption that - as costs fall - hence the cost benefits are passed on to consumers available as lower steel prices; and it is this behaviour which with time really helps to keep up with the cost competitiveness of steel against other raw materials. The long-term fall in costs is thus evidenced by way of a long-term squeeze on prices. More info about sat thep xay dung go to see the best net page. sat thep xay dung


Share This Story

Get our newsletter