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News - News

The rising price of steel

22/03/21

Steel

Growing demand for iron ore, limited supply of coking coal and disruptions to shipping are just a few factors leading to the rising cost of steel across world markets. Australia is no exception to this global trend with suppliers like BlueScope Steel announcing increases to the price of their steel to keep up with global demands. These price rises will ripple throughout the Australian economy, including sheds and steel buildings built with Australian steel. Wide Span Sheds proudly uses Australian BlueScope steel for our buildings, and therefore naturally our prices will increase as well.

Below we discuss the three main factors pushing up steel prices both around the globe and in Australia.

1. Increase in price of iron ore

The cost of iron ore, a key material in the production of steel, is increasing in leaps and bounds with prices reaching a 10-year high at $222 AUD per tonne at the start of 2021. Iron ore prices didn't stop there rising to over $290 AUD per tonne in May 2021. Much of this increase is being driven by demand for steel in China off the back of industrial stimulus from the Chinese government. According to Nikkei Asia, Chinese steel imports surged more than 150% in 2020 alone. The article also points to a report from the China Iron and Steel Association who see the current demand of steel not peaking until 2023.

2. Supply of coking coal

Coking or metallurgical coal, another important ingredient in steel production, is also climbing in value due to limited global supply. Australian coal mines have benefited from this demand as a key global supplier of the resource with Australia being the number-one exporter of the metallurgical coal used for steelmaking. With buyers of Australian coal diversifying across Europe, South America and India, prices of coking coal saw a lift in February 2021 despite trade bans from the Chinese government. 

3. Disruptions to global shipping and trade

If a global pandemic and ensuing recession wasn’t reason enough, issues with seaborne supply chains along with politically motivated trade wars have added to the disruptions facing global supply of steel and production materials such as iron and coal.

The Effects of Rising Steel Prices on Wide Span Sheds

These are just three of several factors that we believe are driving steel prices in Australia and globally. Wide Span Sheds does not compromise on quality, and we believe BlueScope Steel provides the best quality Australian steel. Because of this stance, the price of our buildings will be forced to keep pace with that of BlueScope Steel which has led to several announced price rises throughout the year. 

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