The Impact of Rising Prices of Raw Materials & Global Cost Uncertainty of Steel
Unprecedented rises in the cost of raw materials like iron ore, oil and coal is having a direct impact on global markets and manufacturing processes around the world. The price of raw materials and by-products like steel are expected to remain fairly high in 2022.
Beside the increased global cost of steel we are now seeing increased costs of other essentials that Easyquip relies on including plastic resin, paint, freight, galvanising, wages and general business overheads. These rises and fluctuations in steel prices and other materials are expected to continue for the foreseeable future, which directly impacts our costs of doing business.
Why Are Global Prices Rising?
Geopolitical instability from the Ukraine-Russia conflict, continued impact of the pandemic, zero-covid lockdowns in China, international shipping constraints, state-mandated measures to reduce carbon emissions, zero-covid mandates, international demand and supply chain pressures, and spiralling inflation are all significant factors that have heightened prices, cost uncertainty and decreased availability of steel and many other raw materials in 2022.
Unfortunately, Australia is not immune to the significant price increases and cost uncertainty as we’ve all seen and experienced. There’s also a higher demand for Australian made steel as governments pursue infrastructure projects to stimulate their economies post-pandemic, which is contributing to these price rises in Australia.
Prior to the Russia-Ukraine crisis, analysts such as Fitch Ratings expected HRC steel prices to fall in 2022. Due to the heightened uncertainty and volatility in the market caused by the aforementioned issues, forecasts on steel prices decreasing for 2022 and beyond remain unclear. Many analysts are refraining from giving a long-term steel price forecast up to 2030.
The Impact of Price Rises and Cost Uncertainty for Easyquip
What does this mean for our customers? In response to volatile prices of raw material we must continually review our pricing to ensure we are able to deliver value to our customers and remain financially stable. Consequently, the cost of our waste handling equipment will increase proportionally to the cost of the required materials, until there is greater price certainty for our primary manufacturing materials.
Effective as of 1 July 2022, Easyquip cannot honour historical pricing and clients will have to request up-to-date quotes for all of our waste handling equipment.
All Easyquip orders now need to be quoted on a per job basis as we can no longer commit to holding prices for extended periods of time.
This will allow us to provide the best offer available at the time of quoting and confirm a validity date on that price. We will continue to monitor these costs closely and adjust them accordingly to ensure optimal value for our customers.
We further recommend that you ensure your customers and colleagues understand that prices are volatile and that prolonged delays on decision making on contracts or purchase orders are likely to experience cost increases.
On a brighter note, Easyquip is determined to uphold the reliability and quality of our products. With sufficient stocks of material and a strong supply chain, we are confident that we are well placed to supply the equipment you need to keep your business growing and your customers happy.
Easyquip strongly believes in being transparent and honest with our customers about the potential impacts of the fluctuating steel prices on waste handling equipment. We’re keeping all of our customers up-to-date with price rises that affect their contracts. If you have a contract with Easyquip and would like to discuss the impact of these price rises, please contact us.
Current Lead Times at Easyquip
In light of the current market conditions, lead times for Front lift Bins and Hook Lift Bins from our QLD factory; and for Front Lift Bins from our Victoria factory are currently running around 6-8 weeks from order to delivery. Lead times for Hook lift bins from our Victorian factory are currently running at 19 weeks from order to delivery.
We strongly recommend that our clients place orders now or as early as possible to avoid delays and to secure greater cost certainty with an up-to-date quote from Easyquip.
On behalf of the Easyquip Team, we all appreciate your continued support and confidence as we strive to provide the best value Australian made waste handling equipment on the market.
If you wish to discuss the situation further or if you need a quote on new or existing requirements, please feel free to contact us by phone or email.
General Manager – Easyquip
1300 797 543