New Zealand’s steel sector enters the final stretch of 2025 in a noticeably more stable position than it began the year. After two years of soft demand, aggressive discounting and elevated construction-sector stress, the market appears to have reached a cyclical floor. Early signs of recovery are emerging across residential activity, while infrastructure delivery remains steady. Several distributors have now moved to implement cost-based price increases for December and January. These adjustments are modest, but they mark a shift in tone. The deflationary phase has ended, and the sector is preparing for increasing landed costs through 2026. A stabilising global environment is helping to anchor this shift. Steel feedstocks have firmed from their mid-2025 lows; freight remains structurally higher into New Zealand; and the NZD has tracked around USD 0.56 – 0.58 for much of the past quarter. This is around 6 – 8% weaker than mid-2024, adding an effective 4 – 6% to landed costs.

With margins compressed and input costs no longer easing, local suppliers have signalled that selective increases across carbon, stainless and aluminium are required.

Domestically, the construction sector is finally showing clearer signs of turning. Treasury’s November Fortnightly Economic Update noted improving sentiment in construction-related business surveys, alongside a steady rise in building consents. According to Stats NZ, the actual number of new homes consented in the year to October was 35,552. This was a 6.2% increase on the year to October 2024. These figures were released on December 1. “The lift we are seeing this year is being driven by higher-density homes rather than traditional stand-alone houses,” said Stats NZ´s economic indicators spokesperson, Michelle Feyen. “Townhouses, flats and units were the main contributors to this rise, supported by a rebound in apartments,” she added. Of the multi-unit homes consented in the year to the end of October (compared to October 2024), townhouses, flats and units were up 9.9% at 15,484. While overall activity remains below the 2021 – 22 peaks, stabilisation after two consecutive down-years is significant. Westpac also reports that concrete poured rose 2.3% in Q3. While this was not enough to offset the sharp Q2 fall, it was nonetheless encouraging as an early signal for Q3 GDP and forward momentum.

The non-residential picture is uneven but is no longer deteriorating. Offices and factories have led value growth in the past year, even as overall commercial development remains constrained by higher vacancy rates and cautious occupier demand. However, with the Reserve Bank of New Zealand having cut its Official Cash Rate in late November by 25 basis points to 2.25%, financing conditions should progressively improve through 2026. That said, analysts predict that developers are still likely to move cautiously. Manufacturers are already seeing some lift. BusinessNZ´s Performance of Manufacturing Index (PMI) for October came in at a healthy 53.3 seasonally adjusted. A PMI reading above 50.0 indicates manufacturing is generally expanding; below 50.0 means it is declining.

Across key steel-related commodities, the global picture is best described as “stability at low levels”. Iron ore and coking coal have firmed from their mid-year lows, while nickel and stainless inputs have begun to bottom out, reducing the likelihood of further mill-led price reductions. Aluminium continues its stronger run, supported by tight global supply and firm industrial demand, rising 5.1% in October month-on-month, according to recent ANZ commodity data. Combined with a weaker New Zealand dollar, these factors suggest landed costs are likely to rise through 2026.

On which point, freight into New Zealand remains elevated by world standards. Despite global container indices falling sharply through 2025, local rates have not eased to the same extent. This reflects limited carrier competition and the reliance on a single regular break-bulk service for heavy, large-dimension or long-length steel. Several carriers have already issued rate increases for November – January, and port-related charges due for review in early 2026 are likely to maintain upward pressure. Some seasonal softening may occur over Christmas, but the broader outlook for 2026 remains “stable-to-firm.”

Looking ahead, the combined signals indicate a cautiously optimistic outlook for 2026. The trough now appears to be behind the sector. Residential demand is stabilising, manufacturing is improving, infrastructure remains solid, and cost conditions have shifted from falling to firming. This helps to explain the recent round of distributor increases and suggests further rational, cost-based adjustments may follow.

Readers seeking additional depth on global and domestic pricing signals can refer to the Steel & Tube Procurement Update – November 2025. Click on:  https://blog.steelandtube.co.nz/procurement-update-nov-2025