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Floods put further strain on steel supply

The recent flooding disaster on the NSW North Coast, Central Coast and Sydney areas has had disastrous consequences for so many people on Australia’s east coast, and it has added to the supply issues facing the Australian steel industry.

While Edcon Steel has been very lucky and has not been directly affected by the floods, we have been deeply impacted by the stories of those who have, including some of our staff and customers.

Transport disruptions

Transport disruptions

A complicated network of suppliers, manufacturers and processors across the country, and across the world, contribute to the Australian steel industry. Each of these operations is dependent on transport infrastructure, including maritime, rail and road.

The recent NSW flooding event has affected the rail corridor between Brisbane and Sydney, road networks between Sydney, Brisbane and Northern NSW, and has had impacts on transport within the Sydney metropolitan area. 

One supplier has been forced to idle mills due to the damage to the north-south rail line, which is used to transport hot rolled coil. The full extent of damage has not yet been determined, but it is suspected that there are over 60 locations along the 500km rail line that require repair. While they are endeavouring to use road freight where available, it is expected that it will be two to three weeks before coil deliveries return to normal. 

Edcon Steel has also been advised of production shutdowns at Orrcon’s Salisbury pipe and tube mill in Brisbane.

These impacts will add to an already historically under-stocked Australian steel and metal industry, with the events of 2020 already stretching the supply of steel pipe and tube.

Factors affecting supply

Factors affecting supply

The shortages and delays we are currently experiencing are the bi-product of a culmination of a series of events, which have made steel and metal supplies extremely difficult to guarantee.

Firstly, the COVID-19 pandemic and associated government restrictions forced manufacturers across the world to scale back production, with forecasts predicting a marked drop in demand.

This forecast proved wildly inaccurate, and demand is now far outstripping supply.

Secondly, the current shakeup within the international shipping industry has led to a significant shortage of shipping containers, increased shipping and storage costs, and shipping delays. The importation of steel and metal into Australia has been significantly affected and is at historic lows.

The floods across Australia’s east coast have now added further strain to the industry, with the previously mentioned disruptions to transport and production.

Disrupted service

Disrupted service

Edcon Steel is committed to serving our customers, and are continuing to work with our suppliers to source and secure the stock we need.

We have been in constant conversation with our network of suppliers from across Australia to try and fill our shelves and minimise the impact of recent supply disruptions.

We will continue to keep searching for the products you need. We have worked hard over the past six months to ensure we are well stocked and will continue to do so.

However, the strain on the market has made sourcing some sizes of products a difficult task. We urge our customers to be careful when making commitments relating to the delivery of steel or metal products in the current market, regardless of where they source their steel or metal.

We are asking you for your continued understanding in these difficult times, and are committed to doing everything we can to minimise the effect on you, our customers.

We may not be able to deliver the products or service that we have in the past, so please keep this in mind on your next job.

Customers should also keep in mind that reduced supply and rising demands have resulted in increased prices, which are expected to continue throughout 2021. Read more steel articles to find out more about the steel industry, customer projects and product resources.