# Energy-intensive industry and Steel

Energy-intensive industry needs steel; their prices have moved together.

Source page: https://www.materialinsights.org/links/energy-intensive-industry-and-steel/

[Energy-intensive industry](https://www.materialinsights.org/energy/e_heavy_industry/) (energy) and [Steel](https://www.materialinsights.org/commodities/steel/) (commodity): 2 relationships.

## How they are linked

### 1. Material need

*Physical flow · Direct · Steel → Energy-intensive industry*

Building or running Energy-intensive industry needs steel.

### 2. Price link: electricity cost

*Cost and price · Weak · Both ways*

Electric arc furnaces, which make most US steel from scrap, are large power users, so electricity is a key cost. The industrial power index correlates at only 0.09 monthly and 0.29 yearly, because power contracts and steel prices reset on different schedules.

- **0.09** monthly change correlation
- **0.29** 12-month change correlation
- **1.09** fitted elasticity

Built from the site data on production routes, energy flows, industry value chains, input-output tables and prices.