We examine the relationship between the choice of steelmaking
technology and energy prices in Germany using data beginning 1970. The
analysis indicates that technology choice began to cointegrate with
comparative energy prices in the early 90s. The short and long-run effects
of energy prices are captured in a partial adjustment model; the ratio of
electricity to coal prices is seen to exert sizeable influence on the short
and long-term deployment of the electric arc furnace for secondary
steelmaking. If current trends in energy prices continue, the share of
secondary steelmaking in total steel production is expected to increase
rather slowly
