How Steel Pricing Works
Ever noticed how the price of steel seems to fluctuate? Whilst steel is one of the most widely used commodities in the world, it is not immune to market disruption and wild fluctuations. As a leading steel fabricator in Sydney, we keep our fingers on the pulse in order to deliver a top-quality product at a reasonable price to our valued customers.
In this blog post, we will highlight some of the factors which affect steel prices.
Supply and Demand
This is perhaps the biggest influencing factor on steel prices. With booming demand comes a decrease in supply, and naturally the price of steel will begin to rise. On the other hand, when demand is low, supply will be high and the prices will be lower.
Steel fabricators don’t just consider current market trends, we also look at forecasted supply and demand in order to plan for any changes and ensure our inventory is sufficient. Regional factors can also influence the price of steel, such as the cost of transport, cost of raw materials, energy prices etc. In purchasing Australian steel, you will be supporting the local economy and receiving a quality product backed up by exceptional customer service.
Industry Demand
Steel is the most widely used metal in the world, being used in everything from the automobile industry through to construction. If there is significant growth in any one industry, demand for steel will suddenly increase and start to impact on global pricing.
Shipping Costs
Making and delivering steel is an intensive process. From heavy raw materials to the finished product in its many forms and sizes, shipping steel can be a logistical challenge in itself – particularly if steel is being sent to remote areas or there are complicated import tariffs/taxes and forms to deal with. Steel producers need to consider local labour costs as well as fuel and logistical factors, and this will impact upon the final price.
Material Costs
Steel requires vast amounts of scrap metal and iron ore, and any changes in the availability of these resources can push the price of steel up. Zinc prices can be particularly volatile, and this will impact on the price of zinc-coated steel.
Melting steel also requires a vast amount of heat and energy. Energy prices continue to rise within Australia and manufacturers must take this into account when pricing their products.
Seasons
Seasonality plays a big role in the price of steel. Holidays, weather and different times of the year all impact upon the output of new products which in turn raises or lowers demand for steel. Scrap steel is one of the main components for steel, and when the real estate market is booming there is plenty of it to go around as old buildings are razed to the ground and new ones built in their place.
Summary
As you can see, the steel market is highly volatile, and pricing can be affected by numerous factors. In order to keep prices fair and meet market demands all year round, Mascot Steel make a concerted effort to monitor news stories, statistical data and industry publications whilst also forging strong relationships with our customers and suppliers.
We are a leading choice of steel fabricator in Australia renowned for exceptional customer service, high quality products and outstanding value for money. We have 2 branches – one in Mascot and one in Penrith. If you are in need of steel for an upcoming project, make us your first choice of supplier. We cover all of greater Sydney and Metro. Call us now on (02) 9313 1313, or send us an email at sales@mascotsteel.com.au to discuss your needs – we look forward to assisting you.
