The State of Steel Supply in Australia

You only need to talk to any nearby tradie to know that the construction industry is having issues getting… well, anything and everything.

The Delta wave of the COVID pandemic has accelerated existing tensions in the steel supply chain, brewing the perfect storm that has left Australia in its worst material shortage in over 40 years.

So, how did these elements combine to create this shortage? And how are ShapeCUT minimising the effect on our customers?

What’s Impacting Steel Supply Cost and Shortages in Australia?

There are many factors at play here – alone, each would have its own level of impact. But when combined, they create a chain reaction that is felt at every point along the supply chain.

First, the number of steel exports from China has seen a massive decline, reportedly up to 50% of its usual production. Up to 30% of Australia’s steel supply comes from China, so any change to the supply from there will have consequences here.

The country’s construction industry, while still a massive juggernaut on the international stage, has seen tremendous reductions.

As internal demands increase and the Chinese government takes a closer look at how the industry operates with an eye to decrease production by 2030. This is the global deadline for reducing carbon emissions that many countries are working towards, and China is no exception.

China’s efforts to reduce energy usage in the steelmaking process will continue. So it will be a while before they can continue making steel in the quantities the global market is used to without exceeding the 2030 targets.

Another pressing issue is that it has become physically harder to move steel.

Local Delta outbreaks in coastal communities around the world have resulted in delays in every shipyard you could think of.

Imagine the Evergreen traffic jam, but felt in every port around the world at the same time.

You can see how the delays, not to mention the already high shipping costs, would quickly multiply and ripple out across everyone’s business.

These are just some of the reasons that steel is getting more expensive and physically harder to get.

As one of Australia’s Major Metal Processing Firms, How Is ShapeCUT Maintaining Steel Stock Levels?

Experts are warning that it could take a couple of years for things to fully recover. Importantly, our customers can be assured of no major changes to existing or new orders in the coming months.

At present, ShapeCUT have a well stocked inventory of steel. This means we are in a good position to complete steel profile cutting orders in full and on time.

At any given time, we stock over 4,000 tonnes of steel at our Brisbane steel cutting facility. As it stands, we have good reserve stock levels of plate steel from our Australian suppliers.

We remain committed to sourcing local wherever possible and offering the best quality at a fair price.

Future Steel Supply Predictions

We are anticipating the industry will face some challenges coming into 2022. Stock challenges are likely to increase over the next four to five months. But this will be the case for steel suppliers all over Australia.

Rest assured, as the full impacts of these challenges start to come into effect, ShapeCUT will offer full transparency on lead times as we all work through this unique and challenging time for our entire industry.

We thank all our customers for your continued support. To contact us about your next steel cutting project, call our team today on 1300 742 732.