Have you ever wondered how steel pricing works? You’ve probably noticed that like most commodities, the price of steel fluctuates. While steel is one of the most commonly used commodities in the world, it’s not immune to market disruption and wild fluctuations.
So, how does steel pricing work? We thought we’d use this post to discuss some of the factors that affect the price of steel. So let’s dive in and take a look:
Supply and Demand
This is probably the biggest factor in determining the price of steel. When there’s a large demand for steel, the price naturally goes up. On the flip side, when demand is low, the price of steel dips.
As steel fabricators, we don’t just take account of current market trends. We also keep an eye on the forecasted supply and demand. Ths way we can plan ahead and ensure we have sufficient in our inventory. Other factors such as energy prices, cost of transport, and the cost of raw materials, can also impact steel pricing.
When you purchase Australian steel, not only are you supporting the local community, but you can rest assured that you have a high-quality product combined with exceptional customer service.
Steel is used in so many things from construction through to the automobile industry which is why it’s one of the most widely used materials in the world. If there is suddenly significant growth in any one particular industry then the demand for steel increases, and this affects global steel pricing.
Huge amounts of iron ore and scrap metal are required to produce steel and should there be any change in the availability of these raw materials, then steel pricing can be affected. The price of zinc, in particular, is extremely volatile and this can impact the price of zinc-plated steel.
It also requires a lot of heat and energy to make steel. As energy prices continue to rise in Australia manufacturers have to take this into account when pricing steel.
Shipping steel can be a logistical nightmare, especially if the steel is being shipped to a remote area or to an area where there are complex import taxes/tariff forms to comply with. Labour costs, as well as fuel and logistical factors, need to be considered by steel producers and this can influence steel pricing.
Finally, seasonality also has a role to play in pricing steel. Weather, holidays, and different times of the year can all impact the output of new products. This, in turn, can lower or raise steel demand. Scrap steel is one of the main components of steel and at times when real estate is booming there is plenty of it around, as old buildings are being bulldozed to the ground and replaced with new buildings.
As you can see many factors affect steel pricing. To meet market demands and keep our prices fair all year round, we make it our business to read industry publications, monitor news stories, and evaluate statistical data while also forging strong relationships with our suppliers and customers.
We’re one of the leading steel fabricators in Queensland with many years of experience. If you need steel for your next project then why not make Metro Steel your first choice of supplier. Call us now on 07 3204 1000. Or drop by our purpose-built facility at 109 Kabi Circuit, Deception Bay, Qld 4508 to discuss your requirements.