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Estimates indicate that the cost gap for billet production between the Electric Arc Furnace (EAF) and Blast Furnace-Basic Oxygen Furnace (BF-BOF) routes in Southeast Asia is projected to widen for the fourth consecutive month in April 2026. JIS G 3313 SEHD steel strip, Data shows the spread expanding from $81/tonne in March to $84/tonne in April.
The cost projections for April are based on March raw material prices and calculated for one-month forward delivery. JIS G 3313 SEHD steel strip, The calculations assume a 10% scrap usage rate for the BF-BOF route and 100% scrap usage for the EAF route, with an EAF scrap yield of 89%. Based on these parameters, the billet production cost for the BF-BOF route is estimated at $452/tonne (up $15/tonne month-on-month), while the cost for the EAF route is estimated at $536/tonne (up $18/tonne month-on-month), indicating a more pronounced cost increase for the EAF route.
Regarding raw materials, price trends diverged in March: the average price of seaborne pulverized coal injection (PCI) coal (CFR China) rose to $131.4/tonne from $122.6/tonne in February, while the average price of seaborne metallurgical coke (FOB China, 62/60) edged down to $218/tonne from $220.5/tonne; JIS G 3313 SEHD steel strip, meanwhile, the price of iron ore increased from $99/dry tonne in February to $106.4/dry tonne in March.
At the same time, scrap steel prices continued to strengthen; the average price of HMS 1/2 (80:20, CFR) rose by $15.7/tonne month-on-month to $334.4/tonne, and the average price of HRS101 increased by $18.7/tonne to $382.2/tonne.
Overall, as scrap steel prices rose more sharply than those of iron ore and certain blast furnace raw materials, production costs for electric arc furnaces faced greater pressure, further widening the cost gap compared to the blast furnace-basic oxygen furnace (BF-BOF) production route.
