The Steel Feedstock Index (SFI) is a creation of the Australian Steel News (ASN) newsletter and is not found elsewhere in the sector. Whilst it doesn´t show the actual cost of buying steel in the Australian marketplace, it does show the month-to-month change in the combined price of the ingredients proportionally used in the making of steel via the blast furnace (BOF) method. First, the following pricing information is obtained:

Iron ore  –  62% Fe fines iron ore CFR China via SGX Group.

Coking Coal –  SGX TSI FOB Australia Premium coking coal futures.

Steel scrap  –  Platts TSI HMS ½ 80:20 CFR Turkey via London Metals Exchange

For the SFI calculation, we assume 1.6mt of iron ore plus 0.9mt of coking coal plus 0.15mt of scrap go into the steelmaking process. By combining the costs of these ingredients, we arrive at the Steel Feedstock Index expressed in USD per metric tonne.