Pacific Steel Raises Prices By 18%

Media release
July 25, 2008

Pacific Steel Raises Prices By 18%

Pacific Steel Group has advised customers it will increase the price of its reinforcing steel bar and wire rod products by 18%, effective from September 1, 2008.

Pacific Steel Group general manager John Beveridge says price rises in the past two quarters were largely driven by the rising cost of scrap metal. The latest price change reflects additional factors, including higher freight charges, and the costs of steel-making additives such as electrodes, carbon and vanadium having more than doubled, along with a weakening NZD.

The latest price change follows on from a 25% increase announced in May, taking the total increases for the year to around 60%. Despite the rapid rise in prices, demand in New Zealand and Australia continues to exceed supply, Mr Beveridge says.

Pacific Steel says by setting quarterly prices it has buffered customers from some of the volatility in scrap and imported product prices. The cost of scrap metal has risen approximately 140% in the past eight months.

“Our forward outlook is that after a series of rises, the price of steel will now hold steady for a period of time. Pacific Steel’s offer is still very competitive relative to imported steel products,” 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 worldwide, has been behind the significant rises.

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

ENDS

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