New Zealand’s inflation rate increased to 5.9% for the December quarter - the highest since June 1990 - as a result of soaring fuel, food and house prices. This is having a real impact, so much so that the New Zealand government has reduced the tax on fuel by 25 cents per litre for the next three months. It has also increased the minimum wage to give lower-income families more support and is considering other measures too.
In Australia, New Zealand’s nearest and largest trading partner, inflation in the December quarter was at 3.5%. While fuel prices are high in Australia, they are significantly lower than in New Zealand. All things considered, the New Zealand economy has its challenges at present.
The topic of conversation for many New Zealand metal merchants and consumers remains the challenge and cost of shipping to traditional offshore markets. The sooner this is resolved, the sooner there will be a new topic to talk about at the pub.
Overall, demand remains strong from consumers and volumes flowing into yards have also been helped by elevated LME figures. Despite the issues with inflation and shipping, most merchants and consumers in Australia and New Zealand remain positive.