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FIXING THE STEEL PRICE
WAR
Russia’s war against Ukraine has disrupted steel supply on several levels.
- Targeted assaults on Ukrainian steel plants had depleted steel production
- Nord-Stream Pipeline – Turbine issues are limiting gas supply to 20% of normal capacity means the price of natural gas is being driven to extremely high levels
- Sanctions by the EU against Russia have affected steel supply, read more >
- Russian Slab – Turkey is under scrutiny from the EU and may yet see sanctions for use of imported Slab material from Russia. It’s believed this is something India and China may already be doing
ENERGY
In 2021 energy made up 13% of steel production cost – it’s now a staggering 35%.
PRODUCT QUOTAS
Already hit for much hot rolled stock. For hot rolled products many are already at full quotas with stock being put into bonded storage, filling up the next 3 months quota before it’s even opened.
EXCHANGE RATE
The British pound has plummeted again and hit a record low, its lowest since Britain went decimal in 1971. With most steel purchased in USD or Euros this creates an increased barrier to trade.
STRIKES
Adding to the woes at ports, further strike action is now continuing until 5th October at Felixstowe, one the UK’s largest ports accounting for over 40% of containerised cargo as workers demand higher pay.
HEATWAVE
Low river levels cause transport delays. It may not seem like it now, but the extreme heat in Europe has caused transport delays, due to low river levels, in particular the River Rhine in Germany.
NEWS
The steel price trend has been volatile now for the last 18 months and we are almost certainly going to see an increase in prices.
In summary, merchant bar / sheet & plate prices may have come down as well as Engineering bar prices which are dropping at the moment. However, these are all likely to rise once again due to the factors listed above.
So, how can we work together to ensure ongoing supply?
> Secure your steel and prices now; to avoid any potential increases on popular sizes
> Plan or forward order
> Get in touch to see how we can help plan to safeguard supply and pricing where possible
It’s never going to be perfect timing to deliver this kind of news, but we noticed last time by keeping our customers fully informed ahead of time, can help both parties in the longer term >>
