Steel prices tend to fluctuate significantly, as is the case in the manufacturing of most raw materials. The cost of manufacturing and the production of any raw material will be influenced by a number of outside factors. This piece will take a closer look at some these influences and how they ultimately impact on steel prices.

Oil costs

Steel and oil prices tend to fluctuate very similarly to one another. When oil prices go through the roof, steel prices climb too. Of-course because oil plays such an important role in the production of steel it comes as no surprise that the two are so closely entwined. Keeping an eye on the oil price will thus stand you in good stead if you are looking to purchase steel at a cheaper rate.

Both local and international demand

Major steel producing nations make vast amounts of money selling their products to locations all around the world, and it is this demand that can have a substantial effect on steel prices in general. Some nations may want to start diverting some of their exports to new countries should they find better prices. It works the same way with local demand, if one area of a country is particularly steel-rich, they will have to deal with supply and demand from the rest of the nation.

Property prices and the price of construction

The construction industry uses immensely large amounts of steel. If property prices and the price of construction are favourable to buyers, there will be a spike in the demand for steel. For instance, when the recession hit South Africa, we found that there were very few people looking to start new construction projects. This meant that the demand for steel dipped for a few years, thus affecting the prices. As the world slowly recovers, however, the construction industry is beginning to recover and the demand for steel is rising all the time.

There are many other external factors that influence the steel prices in South Africa. We’ve taken a look at three of the biggest factors in this article. When it comes to steel and steel products, quality is imperative – for reliable standards and the most efficient service contact Genesis Steel today!