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Jan
22

Understanding the Current State of the Steel Industry in America: Supply, Demand, Prices, & Lead Times

By Carport Central   |   Posted In: News & Awards

Understanding the Current State of the Steel Industry in America

 

Enter The Pandemic

This past year has presented some unique challenges for all of us. The pandemic took us all by surprise in early 2020, and even though we’ve entered a new 2021 with new possibilities, we’re all still on the long road to recovery. And the pandemic didn’t just affect our personal health and social interactions – it’s also affected the way that many of us do business, and it’s had some notable repercussions on the global economy as well.   

In this blog, we want to take the opportunity to speak more specifically about what’s going on with the current state of the steel industry in America. And after we break that down for you, we’ll also let you know how Carport Central is proactively responding to these challenges. In short, we’re still well-poised to take care of you by providing the custom steel structure you need!

The American Steel Industry Year-in-Review

But first, let’s take a closer look at what’s going on with the American steel industry right now. Through the first two quarters of 2020, many businesses took a direct hit from the pandemic, and demand for steel products dropped. As demand was on the decline, steel prices went down as a result. The benchmark price for rolled steel reached a low point in mid-August.

The good part about that is that these lower prices ultimately benefited consumers. So from mid-August through the end of the year, steel consumption began to experience a rapid turnaround. Steel purchasing actually bounced back faster than many anticipated it would, and demand quickly began to outpace supply. In fact, steel supply levels have now dropped to historically low levels. But why hasn’t our steel supply been able to keep up with demand?

While we do still have plenty of capable steel production facilities in America, one impact of the ongoing pandemic is that it served to throw an undesirable wrench into the supply chain. Steel mills were forced to shut down their furnaces and curtail production in the second quarter, as a result of the government-enforced shutdown of many “nonessential” businesses in response to the spread of COVID-19. Many of these steel mills have since been able to resume production, but they’ve had to do so at a limited capacity due to limited staff and limited material availability. On top of that – to add insult to injury – various mills have also experienced further unplanned outages, which resulted in even greater disruption of steel production.

As the laws of supply and demand tend to dictate, high demand and low supply have thus resulted in rising domestic steel prices. Between mid-August and mid-December, the price of rolled steel actually doubled, and prices have continued to rise into 2021. As of the writing of this blog, steel prices have now reached an all-time high. While domestic mills are doing all they can to keep up with production, supply levels are still tight across the country. Despite the heavy import tariffs that are in place, more steel buyers are becoming desperate enough to purchase foreign steel at elevated prices, in an effort to keep up with demand.

As long as demand continues to outstrip supply, steel prices will remain elevated. But there is some good news on the horizon. Several American mills are working to expand their production capabilities, and they should be able to add more than 7 million tons of steelmaking capacity to the market over the course of 2021. Once supply and demand begin to approach a better equilibrium, experts say that steel prices should also start to moderate. But over the next several months, we’ll just have to deal with shorter steel supplies and higher steel prices.

To recap, here are the highlights of the current American steel situation, along with some ways that the steel building industry is also being impacted as a result:

  • Steel components are presently in short supply. Thanks to the pandemic, steel production facilities were forced to shut down at times over the past year, and many are still not up to full production capacity.
  • While supplies are low, demand has rebounded significantly. As a result, steel prices have increased.
  • Lumber prices have also skyrocketed over the past year, resulting in an even greater demand for steel construction components.
  • As a result of these connected factors, lead times for steel structures have also significantly increased, and installation jobs continue to get backed up across the industry.

And Now, For The Good News – Carport Central Still Has You Covered!

Admittedly, all of this sounds like pretty bad news if you’re in need of a steel structure for your residential, agricultural, commercial, or industrial application. But there’s no need to worry, and no need to fret! Carport Central is well-prepared to take care of your metal building needs, as we all weather this storm together!

Thanks to our established partnerships with the best material sources and the best manufacturers across the country, Carport Central still has the necessary resources in place to be able to provide you with your perfect, custom steel structure! We always work to stay ahead of the curve, and we constantly prepare ourselves to be ready for any contingency that may come along. Why do we do this? Because we’re committed to ensuring that we’ll always be in a great position to continue to meet your expectations. At Carport Central, we really are steel industry & steel building experts. We also really happen to CARE about you, your family, and your business, and we’re still here to help you get what you need!

While the price of our products may have increased due to the current steel industry climate, we want you to know that you can still count on us to deliver – even when other metal building providers simply can’t. When you order from us, we can GUARANTEE that your building will be provided and installed; many other dealers simply can’t make that promise right now.

At the end of the day, we’re really about building and maintaining relationships. We’d love to have the opportunity to earn your trust, too. Pandemic or no pandemic, Carport Central is still here to provide shelter for your way of life!

You can connect with us online at www.carportcentral.com/contact, or you can speak directly with one of our helpful building specialists by simply giving us a call at (980) 321-9898.

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