Assessing the Impact of China's Steel Consumption Upon the World Price of Steel and its Inputs

by Ernsthausen, Jeffery J.

In this paper, we attempt to estimate the impact of Chinese steel consumption upon the world price of steel mill products and inputs over the past several years. We focus upon the inputs of steel scrap and iron ore as inputs involving competing technologies. We find that an equilibrium relationship exists between China's consumption of steel and prices for steel and its inputs, but we cannot conclude from our analysis that variations in Chinese consumption drive variations in the prices of steel or its inputs.