Steel prices reach levels not seen since 2008!
The benchmark price for hot-rolled steel reached a new record high of $1,080/ton last month.
As fabricators and manufacturers are well aware, steel is in tight supply. Mills idled capacity in the spring in response to the coronavirus shutdowns and have been in no rush to bring it all back online. Tariffs imposed by the Trump administration continue to discourage imports. Demand among the steel-consuming industries is surprisingly robust, unlike the service sector of the economy, which is disproportionately impacted by COVID-19.
The domestic mills are having great difficulty producing and shipping steel on time to their customers, which is putting stress on service centre inventories that are well below normal levels. Supply and demand are decidedly out of balance, forcing steel suppliers to focus on the needs of their contract customers first, leaving many smaller spot buyers to fend for themselves. As a result, prices in the spot market have been bid up to historic highs as OEMs and job shops pay huge premiums to get the material they need to keep their production lines running.
- How do you feel about the current market?
- Are prices going to keep raising?
- When will the prices reduce?
These are all burning questions on our minds however we do not see a reduction in the prices of material in the coming weeks.
Is this the end? Well simply the answer is no, our reasons for this answer are simply because we will not allow the sharp increase in prices affect our long lasting and loyal customers.