Steel Prices in Australia: A Deep Dive into Market Forces
27 Feb 2023 Josh Wiggins, General Manager
IN BRIEF
- The price of steel is a complex and ever-changing aspect of any building project, affected by a variety of factors such as the economy, exchange rates, and the global supply chain.
- This article lists these local and global factors and how they influence both the price of steel components and the overall cost of your project.
- Designing an efficient structure that is engineered for strength – without unnecessarily high material costs – is somewhere Steelcorp can help you save money on your building project.
CONTENTS
The Global Market for Steel
The global steel market is immense, with total world crude steel production reaching 1,877.5 million tonnes in 2020. China leads as the largest producer of steel, followed by Japan, India, and the United States. The structural steel market size was valued at USD 96.94 billion in 2020 and is projected to grow at a compound annual growth rate (CAGR) of 5.3% from 2021 to 2028. Key drivers of this growth include the automotive industry, construction projects, government infrastructure spending, and commercial real estate development.
Why is Steel So Expensive?
Steel is essential in construction projects, industrial buildings, and warehouse projects. Its price is closely monitored by those in the construction industry, as well as investors and analysts. But what exactly drives the price of steel?
The Economy
Josh Wiggins, Steelcorp’s General Manager, highlights several factors influencing steel prices, including the cost of raw materials, production expenses, global demand, and currency exchange rates.
“The cost of raw materials—primarily iron ore and coking coal—is heavily influenced by global economic conditions. For example, when China, the world’s largest producer and consumer of steel, experiences economic slowdowns, it causes a ripple effect on the global market for raw materials,” notes Josh.
When the global economy thrives, demand for steel products rises, pushing prices upward. Conversely, during economic slowdowns, demand and prices tend to decrease.
"Production costs are another important factor influencing the price of steel. Changes in technology as well as input costs such as labour and energy can affect production costs, making it more expensive to produce steel components."
- Josh Wiggins, Steelcorp
A Strong US Dollar
Currency exchange rates also play a significant role in steel prices. As raw materials for steel production are priced in US dollars, fluctuations in exchange rates can impact costs in other economies, including Australia.
“This makes imported raw materials more expensive for domestic producers, which can lead to higher prices for finished products,” explains Josh.
Supply Chain Challenges
In recent years, steel prices have been particularly volatile due to disruptions in global supply chains, heavily impacted by COVID-19. Supply chain challenges, combined with fluctuating demand, will likely continue to influence steel prices moving forward. The availability of raw materials, global demand, and the costs of production and shipping all play a role in shaping the price landscape.
Managing Costs in Your Steel Structure
While global factors like the economy, the US dollar, and supply chain issues impact steel prices, there are several ways to control costs for your industrial shed or warehouse project:
- Optimise Design: Avoid overly large clear spans or complex engineering that drive up production costs.
- Simplify Requirements: Gantry cranes and curved roofs can add significant expenses to your project.
- Leverage Efficient Engineering: Collaborate with industrial steel builders to design cost-effective solutions tailored to your needs.
For a comprehensive breakdown of cost variables, check out our article on commercial structure prices.
How Steelcorp Helps You Save
At Steelcorp, we’re committed to delivering cost-effective solutions for your industrial shed or warehouse project. Our team of experienced industrial steel builders and commercial steel suppliers ensures your project stays on budget without compromising quality. From planning to completion, we provide comprehensive steel construction services to meet your needs.
Contact us today to start designing an efficient and high-quality steel structure that aligns with your vision.
