Why are there so many Steel Price increases across the industry?
There are many factors which have contributed to the numerous Steel price rises and unfortunately it doesn’t appear to be slowing down any time soon.
What are the factors that have caused steel prices to increase?
Steel Mill closures:
When COVID first hit, many global steel mills lowered production or closed some of their smaller mills having predicted that there would be a decrease in demand of steel during the uncertain times. However, with the government stimulus packages, the industry didn’t see a decrease but actually experienced unprecedented demand. The steel mills that were still running couldn’t keep up with the increase in demand.
Last year we experienced delays from our international steel suppliers due to shortages of shipping capacity as international trade surged, which coincided with an influx in the demand of steel across the infrastructure industry. As a result, this increased the freight costs and also extended the supply lead times putting additional pressure on the market.
It’s important to note that these price increases aren’t isolated to Totalspan but is also being experienced across the entire industry in Australia as well as globally.
Input costs of Iron Ore and Coking Coal:
Iron Ore is a key raw material in steelmaking, which increased in value by over 120% since 2020 and continues to rise. The increase in demand in steel globally has driven up the price of Iron Ore with no predictions of slowing down.
Coking Coal, another raw material used in steelmaking, has also soared in value with the increase in the global demand of steel globally. These increases in the input costs to make steel continues to drive up the price.
Economies of Scale:
Government stimulus packages have helped the infrastructure and building industries bounce back quickly from the uncertainty of the initial impacts of COVID-19. The high demand and constrained supply has driven up the price of steel.
I want to buy a shed, but should I wait for the price to drop?
Unfortunately, we can’t predict exactly what is going to happen with the ever-changing market in Steel currently. However, we have already experienced numerous price increases across the past year and with no predictions of it slowing down anytime soon as the global demand for steel continues to rise. Our recommendation would be to lock your shed in now to secure your price before the next price increase.
What does Totalspan recommend?
At Totalspan we want our customers to get the best value for their high-quality shed. We will continue to negotiate with our suppliers to get the best deals for our customers and pass on any savings we can to you.
We do recommend purchasing your shed prior to the next price increase as we predict that there will be more price increases to come. Contact your local shed specialist today on 1300 15 15 25. Who can? Totalspan!