The Global Price Of Steel Continues To Surge - 2021
We want to be upfront with our customers and we know that communication is critical. Prices of steel are at an all time high, and this isn't just a minor increase in price either. Everyone selling or buying steel products are affected. It's important to know what is behind the significant rise of these prices. WHAT IS HAPPENING WITH THE STEEL MARKET IN 2021? The international supply problem is something every consumer and business is facing. Initially when Covid spread into the US, various domestic steel mills shut down. As you can imagine, the demand also declined due to the mandated shut downs. This meant a relatively stable market demand from around March-August 2020. As construction began to pick up and numerous economies started to open back up nationally....metal demand became high. This is great for the manufacturers and contractors who rely on consumers buying their services! Unsurprisingly, previously shut down steel mills are having trouble producing enough to meet the higher demand. Also something many may not be aware of, are the various upgraded and new steel mills on the rise. They are more productive and efficient than the older domestic mills. So rather than firing up the older mills, we are experiencing a shift to open up the new mills domestically.
Another important factor to be aware of is the Section 232 tariffs on imported steel products. Now when a restriction on the domestic metal supply occurs, its more expensive and harder to buy foreign metal, and lengthier to import. Even so, this shortage on steel is INTERNATIONAL, and the U.S. is not the only country in need. Market trends and data show that short term it does not look like prices will be decreasing. SO WHAT DOES THIS MEAN? Simply put..there is very little steel to be had. There's even more.. Manufacturers have set up buying guidelines in order to protect their business - LIMITS on buying ahead or extreme bulk quantities Some steel mills are looking at each customers' previous purchases and allowing them only to purchase that same amount of metal purchased in the past. -Taking on few new customers If a company doesn't have a long track record of purchasing direct from the domestic mill, they will be limited on what they can buy right now because most mills understandably are not able to take on new customers that don't have a long history of purchasing from them.