Expert tips to help you secure your steel prices in 2025

What to do when steel prices fluctuate?

Steel prices have fluctuated wildly over the past ten years, posing major challenges for companies around the world. We sat down with Stefan Sommer, Chief Procurement Officer at CNC24, to take a look at the most important developments and venture an outlook for the future.

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Geographical diversification of the supply chain

Question: “How important is it for buyers to diversify their supply chain geographically in view of the current geopolitical upheavals?”

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Nearshoring and reshoring initiatives

Question: “Are you seeing an increase in nearshoring or reshoring strategies to reduce risks?”

Stefan: Yes, we are indeed noticing a trend towards European suppliers, i.e. nearshoring. More and more companies are paying attention to overall costs, logistics and transparency, which often speaks in favor of relocating production geographically close by.

In some cases, companies are also considering bringing particularly critical or high-quality components back to their own country (reshoring). The advantage of this is closer cooperation with suppliers and the ability to react more quickly to market changes.

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Currency fluctuations and financing

Question: “To what extent do exchange rate fluctuations play a role in the volatility of steel prices?”

Stefan: Currency fluctuations have a direct impact on the cost of raw materials, especially when companies purchase globally. For example, if a company from the eurozone sources steel in the USA or Asia, a fluctuating exchange rate can have a significant impact on the final price.

At CNC24, we recommend taking potential currency risks into account at the contract design stage. In some cases, hedging strategies or price protection can help to reduce these risks and stabilize budget planning.

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Special challenges for smaller and larger companies

Question: “Are there specific difficulties that smaller companies face in securing stable steel prices that larger companies do not?”

Stefan: Yes, smaller companies often don’t have the negotiating volume that large companies can use with steelworks or distributors. While larger manufacturers benefit from volume discounts or long-term contracts, SMEs usually have higher unit costs or fewer contract options.

In addition, smaller companies often have a tighter cash flow, which makes upfront investments or hedging strategies more difficult. At CNC24, we try to compensate for this disadvantage by bundling orders and integrating smaller buyers into our network of verified suppliers, which sometimes allows them to benefit from better conditions and more reliable delivery times than if they were to procure individually.

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Early indicators of market changes

Question: “Are there certain economic or geopolitical indicators that buyers should look out for in order to recognize potential price changes early on?”

Stefan: Absolutely. It is worth taking a look at global indicators such as industrial production, developments in the automotive and construction sectors or central bank decisions on key interest rates, as they influence demand for steel and therefore also prices.

Geopolitical events such as new trade agreements or customs barriers can also quickly set the market in motion. At CNC24, we rely on both official data and feedback directly from our suppliers to identify rapid market changes at an early stage.

Buyers who keep an eye on these signals can better assess when they should fix prices or expand their supply sources.

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Conclusion

In the face of continued volatility due to demand, geopolitical developments and economic factors, forward planning is crucial. With framework agreements and well thought-out risk management, companies can better compensate for price fluctuations and ensure a reliable supply of materials for the coming years.

CNC24 – your reliable partner for metal parts: From nearshoring concepts to currency hedging, CNC24 supports companies of all sizes in coping with the ever-changing steel market. Those who stay on the ball globally, proactively diversify their supply chain and use digital tools can procure secure and cost-efficient metal parts in the long term – even in turbulent times.

About CNC24

CNC24 is the transparent manufacturing cloud for the global procurement of components. With just one contract and contact partner, CNC24 provides access to more than 500 selected manufacturers from all over the world.

CNC24 specializes in plastic and metal components using the production methods of milling, turning, sheet metal processing, die casting, injection moulding and 3D printing.

For quality control, all parts undergo an additional inspection process in the in-house measuring center before they are delivered. CNC24 was founded in 2019 by co-founders Willi Ruopp and Marlon Gerat. The start-up serves all industrial sectors with a need for production parts – from special machinery and plant engineering to IOT and medical, testing and measurement technology.