Steel has become a greatly sought after commodity all over the world. These days one cannot fathom a world without steel, as it is used in almost every aspect of our lives from our cutlery to our cars, to the buildings in our cities – steel is everywhere and we can’t live without it. You may be wondering why and how steel prices change every now and again and what actually influences the steel price? Unfortunately there is no simple answer, the steel price changes every from time to time for a number of reasons. A few of these reasons are mentioned below.
One of the main reasons the steel price varies from time to time is because the prices of the raw materials used to make steel either go up or come down. If the global price of iron ore goes up, you can also expect the steel price to as well. The steel manufacturing process requires a colossal amount of energy to operate on a daily basis. These energy sources can either be from gas, oil or coal and when the prices of these energy sources go up, the steel price will follow.
If there is a large demand for steel, the price of steel will also go up. This is evident in emerging countries which rely on steel to make infrastructures such as roads, railways, buildings and so forth. When a countries economy is booming, picking up or doing well – the country will need more steel. Similarly when there is a recession or a decline in consumer spending, the steel price may fall because the demand has been reduced.
The transportation of the raw materials and the steel products, be it hot rolled coil, angles, flat bar and so forth also plays an integral role in the steel price. If the price of petrol or diesel goes up, the price of steel will have to be adjusted as well.