With the ongoing volatility of global steel pricing below is an explanation of how steel pricing in New Zealand is set and will affect the price of steel goods in New Zealand for the foreseeable future.
New Zealand and particularly those companies like ours who use New Zealand made steel product have pricing that generally lags behind the rest of the world with our costs. Eventually, New Zealand does catch up, as we purchase steel on import parity*.
To illustrate the world steel price movement, extracted below is a graph showing the price movement of Hot Rolled Coil in Chinese RMB for the Chinese domestic market, so does not include freight or the importers margin. The RMB to NZD FOREX is approximately RMB$1 to NZD 0.22, to get a NZD equivalent multiple the latest cost RMB 6016 * 0.22 = $1324.
If we look at this graph, the standard Q235 Hot Rolled Coil price has increased 34% since 19th February 2021. For the preceding period, August to February, the cost in China had increased 37%. This does not take into account the cost of international shipping, which has increased threefold since the lockdowns in China and New Zealand.
As New Zealand’s purchasing lags behind China by 3 to 4 months, we can expect there will be significant steel price increases for at least the next 4-6 months.
If you have any questions relating to steel pricing and how this may impact your project, please feel free to call us on 0800 845 845 or email email@example.com
*Import Parity is the price point where a product’s price matches the value of the same product produced overseas plus all costs related to importing it into the country.
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