Sharechat Logo

Steel price impact becomes clearer

By Hugh Stringleman

Friday 2nd July 2004

Text too small?
Steel users will feel the harsh impact of worldwide price increases during the third quarter, Fletcher Easysteel general manager John Beveridge has warned.

Three lag effects mean that local prices have not yet peaked, but they will soon fully reflect supply price increases of 30-50% from steel mills around the world.

Steel suppliers such as Fletcher Easysteel and Steel and Tube have raised selling prices by 10% a month since March.

Beveridge said the lag effects were order lead time, shipping time and local stock holding, each of about two months' duration.

"Local mills are in the process of notifying us of further increases, particularly in products like sheet, coil, plate, pipe and hollows in the third quarter," he said.

The price increases are in the order of 12% in pipe and hollows.

Easysteel claims excellent stock cover, which has enabled drip feeding of price increases while satisfying all the local demand.

The exception is galvanised steel coil, which is in short supply from NZ Steel at Glenbrook in South Auckland.

Easysteel recently visited steel mills in Asia, and took advantage of a short pause in the extraordinary run of Chinese buying to secure several large orders for New Zealand.

"We see the steel prices remaining very firm for quite some time now, and most suppliers are allocating out capacity, which is not a condition likely to result in price reductions. As a distributor from a very small market, we must pay the price they ask and accept an allocation of our requirements as well," Beveridge said.

Local producers are also allocating steel due to demand and various production constraints.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

July 29th Morning Report
General Capital Annual Shareholders Meeting Results
MEE - Receivers and Liquidators appointed to King Honey
2 Cheap Cars Group Updates Performance Outlook for FY26
Spark announces Director changes as part of Board renewal
July 28th Morning Report
KMD Brands announces new Group Chief Financial Officer
Commerce Commission to issue SOI re Viridian application
FBU - Moody's affirms FBU Baa3/stable rating
Contact Energy FY25 Financial Results Presentation