Steel Prices Continue to Rise

Steel Prices Continue to Rise

The price of steel has seen multiple price rises over the course of the last 18 months and will continue to rise moving forward.

Probably the most significant factor to note is that there is an unusual synchronised peak in global demand for steel. This is thought to be largely driven by governments everywhere significantly increasing spending on building and infrastructure projects in a bid to stimulate a post pandemic economic recovery.

Steel Prices Continue to Rise

Another important factor is the shortage of international freight capacity, and associated extended shipping times. For anyone reliant on international supply chains, this adds to the demand for steel because shipping delays effectively mean that more inventory is needed in the supply chain.

A third significant factor is the limited amount of inventory currently held in supply chains. During the initial period of the pandemic in March to June 2020, most businesses ran down steel inventories based on the assumption of needing to preserve cash during the forecast protracted economic downturn. As steel demand in many sectors rebounded relatively quickly and strongly, there hasn’t been an opportunity to rebuild inventories. The need to rebuild supply chain inventories is creating additional demand.

There are a number of the local factors also contributing to demand in Australia. The rural economy are reporting a boom in agricultural investment on the back of some excellent seasons, particularly for the eastern states. Record levels of residential home construction, particularly for detached dwellings are being reported. This seems to be driven by a combination of funding incentive via Commonwealth and state government support schemes such as HomeBuilder, and a growing trend to lifestyle changes away from capital city CBDs.

There is also a lot of anecdotal reporting to suggest that whilst international borders remain closed, the associated discretionary spending power is being redirected to home renovations, improvements and upgrades. Finally, we are also seeing the early indications of increased investment in local manufacturing capacity and capability across a wide range of industry sectors. These factors are all contributing to increased demand for locally manufactured and fabricated steel intensive products.

These impacts will continue to filter through to the pricing of finished products, so to get the best price on your new Ranbuild shed, customers must order and pay their deposit on their new shed as soon as possible.

*Information provided by The Australian Steel Institute

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