Current Steel Price Forecast And Steel Shortage Update For Q3 2021. Metal Roofing Prices Are Expected To Increase And Steel Supply Will Tighten Through The End Of 2021.
00:00 Are metal roofing prices going up?
02:20 Steel price forecast 2021
03:48 Steel price forecast 2022
05:47 Additional factors that are causing steel prices to go up
07:53 Domestic steel vs. offshore steel
08:22 What is a CRU?
10:00 Contract steel buyer vs spot buyer
11:30 Steel allocations
12:33 Steel shortage forecast
15:13 Reasons to pre-purchase steel
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Steel Prices Update 2021
When will the price of steel go down?
Steel Market Update: Steel Supply Forecast For The Remainder of 2021
If you have been paying attention to the steel industry over the past year, you are well aware that there is a steel shortage which is dramatically affecting the cost of steel. Many are wondering how long this metal shortage will go on for and what the future holds in terms of the price of metal.
As manufacturers of metal roofing and siding products at Western States Metal Roofing, we are getting asked this question often. We recently addressed the price of steel and how it could affect the time you should purchase. However, there is constantly new and updated information on this topic.
Steel Shortage 2021
Is there a steel shortage?
The demand for steel continues to grow day after day, and there are no signs of that stopping. While no one can predict the future, all indicators are pointing to the gap between supply and demand for domestic steel continuing to widen throughout the remainder of 2021.
Why is steel pricing going up?
1. Pending nationwide infrastructure legislation
2. Backed up demand from last year for steel across all industries
3. Businesses and homeowners making improvements to accommodate post COVID work and lifestyle changes
When will steel shortage end?
If you will need to purchase a steel building this year, understand that it’s no longer about price, but rather availability. You want to get what you need while it’s in stock. You also want to work with companies that have sufficient inventory. Now is a good time to develop second and third sources for your future metal needs.
If you have a signed contract and know you will need steel later this year, buy it now. June 2021 price of steel will absolutely be less than what it will cost through a minimum of end of 2021, and very likely into early 2022. In addition, you may not even be able to source the steel in the coming months.
It’s only going to get more difficult to find steel in the summer and fall. The steel mills simply aren’t taking new orders and don’t have any excess production capacity. There will be more demand than supply until the end of 2021 and likely into early 2022. In addition, companies are selling off their existing inventory, but are unable to get new steel ordered. This problem is going to get much worse before it gets better.
Why Is There A Steel Shortage?
There are multiple factors working against metal supply’s favor in the US. One of the major issues is the lack of foreign imports.
When these shortages have happened in the past, foreign supply was imported to help meet domestic demand. However, the US cannot rely on foreign relief this time as the pandemic caused a disruption to the steel industry across the entire globe. As a result, foreign supply is even worse in some of those areas than it is in the United States.
Furthermore, there is more consolidation than ever before in the steel industry and prior to the economy rebounding steel inventories were at record low levels.
How Does Steel Supply Affect The Price Of Steel?
The law of supply and demand, or the economic model of price determination in a market, says that when demand exceeds supply then the price of the good in demand will also rise, as is currently happening in the steel market. If you take a look at the price of steel throughout 2020 and into 2021, it has done exactly that.
The price of cold rolled steel went from $635/ton in August 2020 to $1,450/ton in March 2021. It’s increased even further since March and there is no immediate end in sight.
The price of metal roofing is only expected to increase between now and the end of the year.
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