Current Trends in the Steel Industry That Your Business can Leverage to Improve Sales
Posted on: 26 September 2018
Steel has become ubiquitous raw material for many industries today. However, the steel industry has, time and again, proven to be a complex one. It can be attributed to the industry's unprecedented volatility coupled with imbalances in the supply and demand of metal. The fluctuations have made marketing and selling of steel a complex process that requires in-depth analysis of the current industry happenings. Nonetheless, steel companies can leverage current trends to plan and optimise their sales and marketing efforts. This article looks at what's trending in the steel industry.
Increased Order Volumes — The worldwide economic expansion being witnessed in the 21st Century has bolstered the construction industry in Australia. It is evident from the Australian government's decision to allocate over $70 billion to the country's infrastructural development plans over the next 4-years. Therefore, steel companies should expect to receive more order volumes over the same period, a trend that is likely to drive up sales. Additionally, with China shutting down illegal steel smelting shops, the demand for steel in Australia will increase, at least in the short term.
High Steel Recycling Rates — If your company runs a steel recycling branch, then you will be glad to know that steel recycling rates in Australia are at an all-time high. Currently, about 80%-90% of all steel in the country is being recycled. It can be attributed to a shift in steel culture where end users see it as a sustainable product that can be reused repeatedly. Your business can leverage the trend to improve sales by enhancing the capacity to handle recycled steel products. Besides, recycling contributes to environmental conservation which can send the right signals to "Green Customers."
Receding Overcapacity — One dominant characteristic of the steel industry is that it goes through a cyclic phase of demand and supply. It is primarily due to the durability of steel products. Between 2014 and 2016, there was a global oversupply of steel majorly due to overproduction by China. It led to the dumping of excess steel to other countries with Australia importing most of the excesses due to the low prices and the fact that China is Australia's biggest trade partner. However, the pattern is changing as Chinese authorities are implementing initiatives to curb steel overproduction. Therefore, the receding overcapacity has prompted a rise in the price of Australian steel sales, which can improve your firm's bottom line due to improved profitability.
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