All products are subject to price fluctuations, however, factors that affect these are unique to different commodities. Steel is no exception and there are many events that see the price of steel move in either direction. Everything from the time of year, to the basic supply and demand, can affect steel prices.
If you are considering investing in steel, it’s important to know how the product you are purchasing is affected by market influences. Here are some factors that influence the price of steel day to day.
Supply and Demand
Supply and demand is a basic premise that affects all businesses.
The basic premise it high demand + low supply = a high price, low demand + how supply = a low price.
Steel prices are affected by numerous other prices, including raw materials, energy and transportation. Economies may vary and as the materials to make steel are not sourced in one country, prices of different goods and commodities can also vary.
The Cost of Energy
Energy is perhaps the big factor in the price of steel, as it is used in almost every facet of the industry, from steelmaking and transport to construction. Oil is the most commonly used fuel in the steel industry, so when oil prices are low, so are finished steel products and obviously, when oil costs more, steel becomes more expensive.
Time of Year
The time of year is very important in most industries, especially in the price of steel. Weather can affect shipping and other modes of transport and seasonal highs and lows can affect the demand for new products. Holidays in different countries are another factor that may impact steel price.
In many cases, materials and products in the steelmaking process may need to be imported or exported, so shipping is essential. The politics of individual countries can play a role in shipping costs, as tariffs and taxes between counties can be an added cost. The labour of the crew and the fuel of the ship also need to be taken into account.
Availability of Recycled Steel
Steel is one of the most recycled materials on the planet, however, the rate of recycled steel varies from country to country. Its availability is generally dependent on new developments tearing down older structures. Scrap steel is an important material in many forms of steel manufacturing, so greater availability generally means lower prices.
Availability of Iron Ore
The cost of raw materials is a big factor in the price of steel. Iron ore, coal and scrap steel are all important creating new steel. While scrap steel comes from other buildings being torn down, iron and coal are dependent on the mining industry, which in itself has its own set of complications.
If you have any questions about the price of steel or would like to order quality steel that is fabricated to suit your unique needs, contact Steel Fabrication Services today.
Our team of expert structural steel fabricators have the experience and knowledge to answer any of your questions and will ensure that you find the best solution to suit your needs. To contact us today, simply call, fax, email for information or a steel fabrication quote, or drop by our Brookvale location.