Industry Update: The Rising Price of Steel
The warehousing and logistics industries, not to mention construction, have felt the squeeze of rising steel prices in the past year, and many are wondering when the trend might start to head back in the other direction. In this blog, we take a look at the rising price of steel and how this affects commercial shelving and pallet racking in New Zealand.
A recent report from some of New Zealand’s biggest steel and construction companies, The Allied Buying Group and Fletcher Steel, suggests that, unfortunately, the trend is likely to continue until at least the end of 2021. The report confirms the continuing high price of steel and looks at some of the underlying market drivers.
The Global Chain of Supply and Demand
According to the report, which covers the period from 2020-2021, government stimulus packages intended to keep markets afloat in the face of COVID-19 have ensured that global demand for steel remains high, particularly in infrastructural sectors, while the supply chain has experienced a number of challenges.
First among those challenges of course are the delayed shipments and capacity constraints that emerged as a result of the pandemic, but there are other factors at play. Tensions between China, the US, and Australia have brought about fluctuations and irregularities in the prices of coal and iron ore, both important for manufacturing steel. And while the price of scrap steel has stabilised for now, the price of the finished steel it produces continues to rise.
The Situation in New Zealand
While the New Zealand market retains a good level of access to steel, the cost has inevitably risen for the time being. Meanwhile, the demand for steel in the residential, commercial, and agricultural sectors remains high.
What This Means For Shelving and Racking
The rising cost of steel obviously translates to a rise in the cost of products containing steel, and that means many shelving and pallet racking options.
At Shelving Depot, we have a number of strategies to offset this cost. We maintain good relationships with steel importers and manufacturers, meaning we get a good price on the pallet racking and shelving products we buy, savings we then pass on to you, the end consumer. We also stock a wide variety of high-quality, second-hand pallet racking systems, which means we are still able to offer you excellent value for money.
Despite these measures, the fact remains that steel is likely to be a costly commodity at least until the end of the year. Additionally, the cost of shipping has also increased. This rise is due to massive swings that have rocked international trade since the beginning of COVID-19 pandemic.
A Big Thanks to Our Customers
Despite these difficulties, industry marches on, and the Shelving Depot remains one of New Zealand’s more trusted suppliers of industrial shelving solutions. We’ve earned a reputation for going above and beyond to bring our customers high-quality racking and shelving solutions at unbeatable prices, and that’s exactly what we’ve continued to do over the last year. We offer our sincere thanks to our clients for weathering the storm with us.
Get in Touch Today
To find out more about our range of shelving and racking solutions, head to the contact section of our website and give us a call or send us an email