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May 2016

Cost of Steel on the Rise

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Looking to build a new construction home this year?

metal roof

What about adding a Post Frame Building to your property?

OLYMPUS DIGITAL CAMERA

Here are some things you NEED to know:

  • Global steel suppliers have reported pricing increases for over 16 weeks straight.
  • The increase in steel has jumped 25% YTD.
  • 7 million tons reduced in domestic capacity couple with increased short term demand
  • Increased raw material cost
  • Increase in tariff action has caused a 5 million tons decreased in import
  • Increase in steel making materials has led to reduction in global production against strong demand
  • Closing of domestic producers have caused 5.5 million tons to be removed from the domestic market
  • Steel suppliers are reporting their lowest inventory levels in over 18-months
  • 20% less foreign steel has arrived in the USA YTD

Steel Roles

Although steel isn’t necessarily required for these projects, it has been the preferred material of use for years. Foreign steel manufactures have been exporting their steel at ultra-low costs based on their excess capacity, and have done so to drive employment and capacity utilization. This has caused domestic producers to match these lower steel prices to stay competitive here at home.

We have been fortunate with the ease of availability and price of steel for so many years that finally the sale price of steel being lower than the cost of manufacturing has caught up. Domestic steel producers have suffered great downturn based on this need. Foreign steel has caused many of these companies to operate in the negative forcing closures or others to stagnate based on peripheral goods and services.  Along with  competition in the market place, raw steel pricing has increased, causing cost to produce to rise.

There have been actions taken in an attempt to rectify the current state, such as trade cases that have successfully blocked the import of foreign steel in an effort to breathe life back into the domestic markets. Steel will still be available for these future builds, but expect to see a higher cost and lead time attached to your project.