The steel industry is complex, confusing, and (occasionally) erratic. But it’s also interesting, unique, and wide-ranging. It encompasses almost all parts of the national and global economy; it has an impact, and is impacted by, countless factors.
The steel industry has gone through numerous changes. Shifts in technologies, consumer demands, the global pandemic, and an emphasis on eco-friendly materials have all created changes in this vital sector.
While there are challenges, it remains a good time to use steel, as this essential metal remains one of the most reliable materials for a wide range of uses!
Major Trends in the Steel Industry
Looking Behind: Steel Prices Have Risen Sharply Since the Pandemic
Two years removed from the start of the pandemic, it’s more of a long term trend, but steel prices have been sharply impacted since the start of the COVID pandemic. It should surprise no one, especially steel purchasers, that the price of steel has gone up significantly over the past two years.
According to mining-technology.com, steel that would have cost somewhere around $500 to $800 in the March of 2020 cost about $1,800 in July of 2021. That was roughly a 200% increase in just a year and a few short months. Those prices remain high; Steel Orbis reports that the price for hot-rolled coil steel has continued to climb upward. Scrap and rebar have also seen increases in prices.
These increases create the foundation for the current steel industry.
Chinese Lock-downs Slowing Global Production
The price of steel, like any material, is dominated by the inescapable supply-and-demand principle. If supply is low and demand stays the same, prices will inevitably go up. China is one of the world’s largest suppliers of steel, accounting for roughly half of the global supply. Because of “oppressive lock-down policies,” the incoming supply from this nation has been significantly reduced, further increasing prices for steel.
Steel Demand in the Automotive Industry Bouncing Back
In previous years, the automotive industry experienced a shortage of computer chips. Without these chips, the industry had to reduce its overall production, which meant less steel was being used.
It appears that this trend is fading, as the automotive industry is expected to increase production between 2021 and 2027. Although other metals have been tried, steel remains the dominant material for automotive parts.
Russian Invasion Shocking the Steel Market
When discussing the economic impact of Russian aggression in Ukraine, much of the conversation centers on energy. Oil, for good reason, is the main issue, one that has impacted people all across the globe, Americans included. But the Russian invasion has also rippled into the steel market. Russia is a major exporter of steel, but sanctions from the U.S. and European nations have created another dent in the global supply. This has contributed to an already high price for steel.
Green Steel Appears to Maintain Traction
One of the more interesting and inspiring trends for this sector is the continued interest in “green steel,” which is steel made with a process that is believed to emit fewer carbons. While the industry is still working its way through these changes, it seems that green steel could be a popular choice, especially for buyers and businesses that want to project a clean, environmentally-friendly image.
What Does it All Mean to You, the Steel Buyer, Installer, and User?
Predicting the future is incredibly tough, and no forecast is ever 100% guaranteed. However, it seems likely that steel will maintain its price or continue an upward trend. Unless production is significantly increased, which would take major efforts here at home and a shift in Chinese policy, all signs indicate that steel prices will remain high. Raw material and steel products will likely maintain a higher price.
What does this mean for you? It seems that if you have an upcoming project that involves steel bars, tubing, or any other steel product, you probably don’t want to wait. Although you could delay the project in the hopes that prices will be lowered, you may end up paying a higher price in the future.
So don’t hesitate. If a project involving steel is on the horizon, act now before prices go even higher.
Want to learn more about steel and its benefits? Contact our team today and we’ll help you select the right products for your next project. From steel alloy bars to aluminum tubing, we have the right products at the best possible price!