Higher steel prices cost industries $120bn

Rising steel prices may increase costs for China’s steel-using industries by US$117 billion, the South China Morning Post reported. Top Chinese steelmaker Baosteel and Anglo-Australian mining firm Rio Tinto’s agreement to 79.88-96.5% increases in contract iron-ore prices this year is creating ripple effects for downstream users, as steel prices have increased 40% year-on-year. Steel is the third-largest commodity in China’s producer price index (PPI) after oil and coal. Analysts say the price increases could lead to a 1-2 percentage-point PPI increase this year.