As a designer and installer of structural steel mezzanine floors, we are continually mindful of the potential factors influencing the price of steel. Which is why we are actively monitoring the market daily to ensure we are ahead of the game when it comes to providing the most competitive mezzanine floor quotations for our customers. In this feature, we would like to discuss some of the basic but key elements that affect the price of steel and therefore influence our estimating process.
Global Supply and Demand
Supply and demand is arguably the biggest factor affecting the price of a commodity such as steel.
When less steel becomes available, such as when certain countries experience stagnant growth, production slows down which ultimately drives a higher demand and increases the price. This is the case with the Chinese steel industry which rapidly expanded to become the second largest steelmaker in the world, accounting for 823 million tons of the world’s total in 2014. As a result, China produced more steel than the country needed, this drove down the demand and ultimately led to steel prices dropping significantly.
Cost of Raw Materials
Steel is made up of several metal components, the availability of these materials can change depending on a number of factors. If access to these materials becomes limited, demand will exceed supply resulting in a higher price.
Following on from above, the materials used to create steel as well the product itself can be expensive to ship. Shipping overseas can be costly; labour costs and fuel can also play a role in determining price.
Industries that rely on steel such as construction, automotive and manufacturing can also directly influence steel pricing, if one industry is particularly strong this could drive higher demand for steel and ultimately increase the price of the end product.
Of course, it takes time and experience to the monitor the above factors as well as many others not mentioned. At Hi-Level we have over 25 years’ experience designing, sourcing materials and installing mezzanine floors, if you have any questions relating to this article please contact us directly at firstname.lastname@example.org.
British Steel: http://britishsteel.co.uk/
Tata Steel: https://www.tatasteeleurope.com/en/
Steel Market Update: https://www.steelmarketupdate.com/