Colson Castors Blog

World Steel Prices

World Steel Prices

All we seem to hear about lately is spiralling costs: fuel, food, oil, raw materials and these rising costs impact on all of us. If you’re a castor manufacturer then about 70% of your product is made of steel and that means there will be an impact on your business especially with UK steel prices increasing from around £300 per tonne in early 2004 to current levels of around £700 per tonne. So what’s caused the increase?

Well, there’s a number of contributing factors involved. It’s estimated that we are facing a deficit of 25 million tonnes globally of which 4 million tonnes is in Europe and the problem is being exasperated with mills cutting allocations by up to 25% allowing suppliers to cherry pick who they supply to. In 2008 the global price of coking coal and iron ore increased by 70% and 60% respectively. In addition we are seeing increasing prices for energy and logistics and with main UK supplies coming from mainland Europe the strength of the Euro is increasing prices for European steel by 14%.

It’s worth considering what has happened to steel usage worldwide to put these issues into perspective. It has taken us 200 years to reach global steel usage of 1 billion tonnes and amazingly this figure is expected to double to 2 billion tonnes in only four years! In 2008 China consumed 540 million tonnes - more than half the global usage – and this is set to rise to 680 million tonnes by the end of 2009. The Beijing Olympics is having an affect with production at mills stopping for two months to improve air quality and it will take approximately 18 million tonnes of steel to rebuild after the Chinese earthquake and that’s more than the total UK steel output of 13 million tonnes.

So what does this all mean for the castor manufacturer and user? Well, we know costs look as though they will continue to rise so we, the manufacturers, have to continue finding ways to keep products as competitive as we can whilst maintaining quality and service

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