Soaring global prices push NZ steel up 14pc

Steel prices have risen 14 per cent.

Rising international prices have prompted Pacific Steel to increase costs to its New Zealand customers by 14 per cent.

Stan Clark, Pacific Steel's sales and marketing manager, wrote to customers, telling them of the price hike.

"As an outcome of international steel price movements since the middle of the year, traded steel prices have increased here in New Zealand throughout that period. As a consequence, Pacific Steel has reviewed its prices and will be reflecting this market movement by increasing its prices by approximately 14 per cent commencing for orders placed for manufacture from the November production campaign," Clark wrote.

Pacific Steel is New Zealand's only manufacturer of wire rod, reinforcing bar and coil products. Its Auckland-based manufacturing plant produces about 250,000 tonnes of manufactured steel annually.

The head of one big Auckland-headquartered building business said the price rise illustrated the sorts of pressures being placed on the industry.

Whether it means some big construction jobs might be cancelled because the numbers would not stack up is uncertain.

The chief said the price rise made quoting on contracts much harder. Sub-trades were being asked to hold their prices for a set period so clients could be assured prices would not escalate, the building boss said.

Mark Malpass, interim chief executive of Steel & Tube, sent out a letter in October telling of price rises.

"Global prices for finished steel and stainless steel products have steadily been rising over recent months, driven by increasing commodity prices used in steel making and greater demand for metal products. Of note over this period, have been the significant cost increases for coking coal, iron ore, nickel and zinc," Malpass wrote.

"Due to these market conditions over recent months, we have received price increases from our main suppliers which we cannot continue to absorb. It has therefore become necessary to increase our prices on a range of steel, stainless steel and allied products. The below headline increases will start to apply for orders placed and deliveries commencing from 15 November 2017."

Prices for sheet, plate and coil would rise up to 10 per cent, merchant bar 8 per cent, pipe 7.5 per cent, reinforcing mesh and bar 14 per cent, pipe fittings up to 12 per cent, fastenings up to 15 per cent and stainless steel 7.5 per cent, his letter said.