Steel price respite

Although steel prices are continuing to increase, the rate at which they do so is not – a welcomed respite for the steel industry.

This positive update comes amidst challenging global circumstances that immediately impact the import of materials from the likes of China and Russia.

This steel price respite is certainly welcome development and a sign that the effects of international shocks may be settling down and have completed their cycle. We are hoping to see a flattening of steel prices in the future.

It must be mentioned that the rising cost of fuel and energy (electricity) is shaping up to be the biggest mediating factor in the Australian steel industry (as well as many other industries) in the immediate future.

Silver lining

The recent flooding disasters that have plagued a significant part of the Eastern Seaboard of Australia have not helped either.

Yet, at Edcon Steel we have observed a silver lining as Australia’s PCI® (Performance of Construction Index) March 2022 review shows a 3.1 point improvement.

This improvement has been attributed to an expansion in construction activity, easing staff shortages and changes to the COVID-19 regulations.

Activity in the domestic residential sector also continues to increase significantly, and Australia’s non-residential construction pipeline remains favourable. With this positive outlook, steel producers and suppliers are looking to invest and improve their equipment and processes.

Global circumstances affecting local pricing

Although brass, copper and stainless steel are still subject to pricing pressure, with China’s dynamic zero COVID-19 strategy and continued conflict across Eastern Europe, protracted global changes are worth noting.

Examples of these changes are China’s recent announcement to delay proposed reductions in steel production for environmental reasons to stimulate Chinese economic growth and its commitment to stabilising iron ore prices.

China has also condemned information providers that may be tempted to fabricate price hike information or drive prices up, which will naturally positively affect Australia’s purchasing activity.