Many of our customers have seen the continuing price rises within the manufacturing industry, particularly across all steel shed businesses such as Now Buildings. There are numerous factors that contribute to steel price rises across our industry so to help our customers understand why, we have put together a few key points. If you would like to talk about this more and how it may affect your building, our team is available to have a chat anytime.
What’s happening?
As we all know, 2020 was a globally unprecedented year, with the effects of COVID-19 continuing to be felt across the world. Every industry was impacted differently. The building industry has been heavily stimulated by local and international governments’ post-Covid19 stimulus packages, focused on building, construction and infrastructure. This high demand for Australian exports has led to a strain on the local supply chain which is being felt throughout the manufacturing and construction industry.
How does that affect steel?
One of the key raw materials for steel-marking is iron ore which, earlier this month, reached a new high, nudging $US240 a tonne. A significant contribution to this demand is from the industrial stimulus introduced by the Chinese government, with Nikkei Asia reporting Chinese steel imports have surged more than 150% in 2020 alone.
In addition, the closure or reduced trading across manufacturing sights overseas during 2020 has seen that while factories are reopening, they are struggling to keep up with the demand of the product.
Operating with 100% BlueScope steel
A shed is only as strong as its components, which is why Now Buildings uses 100% BlueScope steel. Our internal structures are Galvaspan, our sheeting is Corrugated and Trimdek, and our finishes are Zincalume and Colorbond. Because we refuse to sacrifice on quality by using 100% Australian BlueScope steel, when steel prices rise it impacts every aspect of our manufacturing costs.
Only providing the best
We believe BlueScope provides the best quality Australian steel, and while some in the industry may choose to import fabricated steel at a lower cost, we are committed to providing not only the best quality to our customers but remaining 100% Australian owned, operated, and manufactured. As such, our shed prices will continue to rise in line with the price increases imparted onto BlueScope.
What does that mean for me?
Within the first six months of 2021, we have been impacted by two price rises, with the third set to occur at the end of the financial year. We have done, and will continue to do, our best to negotiate with our suppliers and, where possible, absorb any price increases to ensure our customers not only receive the best product but the best price possible. As such, we believe there is no better time to invest into a new building and save on our current range before another price rise occurs.
Should I wait for prices to drop before I buy a shed?
While it is difficult to predict the price of steel, which has already gone up at an average of 13% over the last 6 months, there are reports across the industry speculating that prices will likely continue to rise at a similar rate until 2023 as the demand of iron ore and steel increases. With our multimillion dollar buying power, we’ll be fighting to keep our prices low for our customers, however if steel prices continue to rise at the current pace, we may see a $20,000 shed selling for $30,000 in the not too distant future.
Image care of https://markets.businessinsider.com/commodities/iron-ore-price