Pacific Steel Raise Prices By 25%

Media release
May 1, 2008

Pacific Steel Raise Prices By 25%

Pacific Steel Group has advised customers it will be increasing the price of its reinforcing steel and wire rod product ranges by 25%, effective from June 1.

Pacific Steel Group general manager John Beveridge says the company has been forced to increase its prices due to the cost of the raw materials continuing to rise at an unprecedented pace. The latest price hike follows on from a 12% increase announced in March.

With a 100% surge in the price of scrap, increasing freight rates due to the rising cost of oil, and iron ore at record price levels, all steel products, not just reinforcing steel, are being exposed to this type of increase.

“Our outlook for the coming month is that prices will remain high, if not increase further, particularly if we see any weakening in the New Zealand dollar,” Mr Beveridge says.

Mr Beveridge says the company’s prices are still very competitive relative to importing steel into New Zealand.

“The ongoing volatility in the global steel commodities market necessitates regular reviews of our pricing and we are continuing to monitor this situation closely,” Mr Beveridge says.

All Pacific Steel Group products are made entirely from New Zealand-sourced recycled scrap metal, but the price is set by the international market. A global shortage in scrap metal, and strong demand for steel in Asia, is behind a significant rise in the cost of scrap.

Despite the rapid rise in prices, demand in New Zealand and Australia continues to exceed supply, Mr Beveridge says.

Pacific Steel Group in Auckland is New Zealand’s only manufacturer of reinforcing steel and wire, under the Seismic and Wiremark brands respectively.

ENDS

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