Steel Price Fluctuation and Protecting Your Product in an Uneven Market

Date: 22/08/2018

Like any other business operating in the current financial climate, we have had to adapt and try to remain as successful as possible in a challenging market. Thankfully, we have noticed continued growth throughout our business, largely due to our desire to focus on bespoke designs for sheet metal fabrication and offer our customers a highly personalised service by creating specific end products.

The Global Production of Steel

The global demand for steel has observed a marked dip since the financial crisis of 2008 and many economic commentators note that this is the result of China’s overbearing global influence on the cost of steel.

China’s own domestic steel market has declined somewhat over the past few years and so steel manufacturers based in China sought to export their product so as to maintain healthier levels of profit. The importation on Chinese steel into Europe ushered in a particularly difficult time for large, steel companies with production facilities in the UK. Tata Steel, in particular, received widespread press coverage about potential job cuts and factory closures.

Whilst larger companies suffered, independent producers of steel products and smaller businesses that opted to focus on sheet metal fabrication and sheet metal enclosures embraced a localised culture of production and distribution.

Distribution costs have been particularly troublesome for larger steel producers due to increased energy and fuel costs. Couple this with the need to transport immense weights of steel the considerable distance from their suburban factories to centralised locations within large cities.

The Local Production of Steel

For steel fabricators Yorkshire acts as something of a localised hub that serves the surrounding area well. Indeed, we are a local, independent business that focuses on local, independent projects and, to this end, we remain profitable and continue to grow.

Our business model is not focussed on the mass production and cutting of steel for use in London office blocks and skyscrapers. More, we offer a bespoke design and production process that assists our customers in their varied and specific projects.

It is this mode of operation, and our ability to focus on numerous smaller projects rather than one large project, that has helped to protect our business, our products and our services over the long-term.

Sheet Metal Fabrication

Our skilled and experienced team produce highly creative designs for sheet metal fabrication and use 3D CAD and CAM alongside the latest laser-cutting technology to produce sheet metal of all types of shapes and sizes that can fit into all types of nooks and crannies.

Future Price Forecasts

Chinese production of steel is expected to decline over the next few years, with Government officials noting that production will be reduced by 165 million tonnes by 2020. This is largely due to the Chinese economy shifting away from manufacturing and infrastructure and more towards services.

Domestic Production Serving Domestic Consumers

It is thus expected that as Chinese steel production declines European steel prices will become more robust and observe a steady increase based upon demand. This will lead to a circumstance in which more steel is being manufactured and then sold within the same country.

In short, the respective domestic steel markets of European countries will effectively produce and sell steel within their own nationwide market much more than they currently do.

Local Production Serving Local Consumers

This projected circumstance is not entirely different from that of our own current business operations. Whereas future projections point towards domestic production of steel being utilised within domestic environments, we currently operate a model that embraces the local production of steel being utilised with local environments.

Regardless of the peaks and troughs of the international and national steel market, we remain committed to providing our customers with a personal and personable service that places an emphasis on customised products to meet individual specifications. Get in touch today and lets talk about your Sheet Metal Fabrication project.