Steel & Tube Holdings boss Dave Taylor says a "dramatic upswing" in coking coal prices and higher iron ore prices meant there needs to be a hike in domestic steel prices in New Zealand next year.

Taylor made the comments in a presentation at the company's annual meeting in Wellington. The price of premium hard coking coal reached US$307.20 a ton last week from US$85 a ton at the start of June, according to Reuters. Iron ore futures have also climbed to reach about US$70 a metric ton.

Higher coal costs add about US$140 (NZ$200) to a tonne of steel and the rise in iron ore amounted to another $40 increase per tonne of steel, he said. "Already steel prices have shown an upward trend, with steel mills no longer able to absorb this cost increase. These key cost contributors all point to a substantial price increase across all steel products that we expect will impact domestic steel prices in New Zealand very early in calendar year 2017".  Continue to full article