Metal and Steel Price Fluctuations

If you are a first-time buyer of a prefabricated metal building, you may expect to be able to read a price list for various unit options and order at any time during the year to secure your unit before an annual price increase. However, the nature of steel pricing in the international marketplace means that there are many factors that can lead to price fluctuations over a relatively short space of time.

As steel is traded in the international marketplace, the traded price actually fluctuates on a daily basis. Major trends in the price of steel are influenced by the international demand in high construction parts of the world like China, India, and Brazil, as well as currency conversion rates and supply issues such as factory outages. Even natural disasters in a part of the world involved in manufacture or transportation of steel can have an immediate impact on the market price. The global trend of steel prices has been downwards over the last few years leading to a situation which is favorable for purchasing and installing a prefabricated building, however, this trend is expected to change in the next few years as prices return to 2008 to 2010 figures. Global demand is rising as construction activity increases and this factor is beginning to put upward pressure on the global steel price. The greater the global demand for steel the higher will be the price. The higher the production of steel from the source countries, the lower will be the price of steel. The greater the strength of the dollar in international currency trade, the lower will be the steel price.

As different companies are dealing in different volumes of steel orders in the international marketplace, economies of scale can also play a significant role in the price of steel offered to you as an end customer. A small scale steel manufacturer buying small quantities of steel will definitely end up being more expensive in terms of the price they can offer compared to a manufacturer aided by the benefits of bulk purchasing power. It is wise to deal with local manufacturers that are large enough to take advantage of this factor.

The design of your specific unit will also have a direct bearing on the price. The more steel required in the final product, the more the unit will cost. The cost of the steel is by far the most significant factor in the overall price of any prefabricated metal building. Government regulations are a relevant factor in this aspect of price determination. Regulations regarding the snow loading or wind rating of a unit in a specific location will have a direct bearing on the design and therefore on the price. Minimum engineering specifications are also affected by government regulations and may determine the thickness of structural beams or side panels. Obviously, all of the aesthetic features also require certain quantities of steel and each feature selected will effect the price. Two buildings may look identical in terms of size and finishes, but they may vary in price quite substantially based on the design and the steel quantities that are required.

In the North American market, there is a seasonal effect on the demand for prefabricated metal buildings. Spring is by far the favored season for building and assembly of units on site. This local trend also has an effect on pricing as many buyers are competing for the same sort term steel supply and building contractors to finish their project in the preferred season. It is possible therefore to take advantage of the lower demand winter season to lock in your steel price by placing your order and deposit at the right time and therefore reduce your overall project cost.

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