Why are steel prices rising?
Now that British Steel has increased prices by a record-breaking 25% - a rise of £250 per tonne of all new orders - the impact of Russia’s invasion of Ukraine is evident. There has also been an increase in nickel costs by 97%, zinc by 16%, aluminum by 6.2% and copper by 3.5%, according to the London Metal Exchange.
So, why have current world circumstances had such an impact on UK steel prices? Due to economic sanctions against Russia by the EU, trading to certain regions in Ukraine has now been forbidden, meaning that Ukraine’s steel production has temporarily stopped. With Russia being the fourth-largest steel exporter, responsible for shipping steel to over 150 countries, the impact on the construction supply chain is massive.
But this isn’t the first time that the world has experienced soaring steel prices. The emergence of the COVID-19 pandemic caused steel to increase rapidly in 2020, aligning with a period of metal shortages that severely impacted the market. A slow production recovery, the development of order backlogs and subsequent delivery delays, along with a number of obstacles preventing obtaining of steel from overseas, are just some of the contributing factors that caused prices to peak.
What does a rise in steel prices mean for the car scrapping industry?
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