Price changes at Edcon Steel
Given the many challenges facing the steel industry today, it is likely the market will remain tight and those in the industry will continue experiencing difficulties for the foreseeable future.
Edcon Steel has not been immune to these challenges, but we are committed to keeping our customers informed about the factors leading to price increases and providing information as to how you can protect yourself from the changes in market prices.
Steel prices holding at an elevated level
Steel prices are currently maintaining the elevated level brought on by recent chaos in global industries.
Major steel suppliers have not made any recent announcements about further price increases for the next month, so we are cautiously optimistic that this could be the peak of the recent steel price hikes.
Commentary from abroad indicates that lead times at steel mills are reducing, which has historically been a good sign for steel prices. The recent 0.5% interest rate increase implemented by the RBA will add to the slowing of the market, and this is likely to mean the demand will be more subdued.
The result of slower demand normally flows through to reduce prices. We have not had any signals yet from our suppliers, but it would make sense that this is the next move. But, in this crazy world, who knows?
The impact of China’s COVID and economic policies is continuing to affect the Australian steel industry, so it may be too early to get excited. At Edcon, we remain hopeful that steel prices have at least plateaued and believe there is a good chance the next price movements we see will be downwards.
Fuel costs start to bite
It is not just steel prices that are affecting Edcon Steel, we have done all we can to minimise the impact of other rising costs on our customers by delaying price increases for as long as possible.
In the past 12 months, our steel costs have risen by over 40%, and this has had a major impact on our customers, as we have had no choice but to pass these increases on. During this period Edcon Steel has also experienced wage pressure and fuel cost increases, which have had an enormous impact, considering our delivery services.
The graph above shows how diesel prices have risen by 45% over the last 12 months. While Edcon Steel has held delivery charges and other service pricing steady during this period, we can no longer absorb these price increases.
Unfortunately, this means we need to increase our cutting and delivery charges to recoup the extra costs of fuel and labour we have incurred. Edcon Steel delivery fees will increase on 1 July 2022. Please speak to your local steel store for details on these price increases.
Our steel cutting fees will increase by approximately 5% across all our cutting services. These cutting charge increases are cost recovery for increases in consumables and labour costs.
What this means for you
Clients preparing fixed sum contracts may take some encouragement from the current situation and believe that today’s prices represent a peak in the price of steel.
However, our recommendation is to remain cautious as there are so many unpredictable local and global factors influencing the market, and customers using fixed prices for steel contracts longer than 30 days are still at risk.
We recommend a cost-plus or provisional costs contract for your steel package while this volatility continues.
Are you looking for complete steel solutions?
Edcon Steel is Australia’s most comprehensive online steel and metal superstore. We cut and supply steel and metal – in a wide range of shapes, sizes and grades – for all your project needs.
We know metal and steel – and we know our customers appreciate our service and stockholding, so feel free to contact us for your steel or metal solution today.
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