The Changing Cost of Steel: Rising Prices and What to Expect
The cost of steel is steadily rising, and it's an issue that every metal building manufacturer should be dealing with. As the price of steel continues to rise, more customers are looking for alternatives- but they're hard to find.
We're going to look at how this change in prices affects metal buildings across the country, and what you can do about it.
Overview of the Steel Industry
The steel industry started in the 1850s when it was still mostly an artisanal trade centered in Great Britain. Back then, the production process took a lot more time and energy than today's methods- but that also meant they didn't have to worry about fluctuating prices too much either.
As steel became increasingly important for infrastructure projects, such as bridges and dams, demand skyrocketed thanks to World War II. This led industry leaders like US Steel Corporation to rise up with new technologies, making the entire process cheaper.
The 1950s saw companies finally adopt these techniques on a large scale, making them even less affected by fluctuations in price since there were so many different ways of producing steel at this point, from blast furnaces down to electric arc furnaces.
The 1980s saw a shift in the steel industry when antitrust legislation broke up the US Steel Corporation, and international competition grew fierce. This led to an intense period of consolidation that slowed down production all over but also helped it adapt to changing market needs like improved quality for automotive manufacturers.
In recent years with worldwide economic growth slowing down during 2008's Great Recession, demand started dropping off significantly as people were less able or willing to spend their money on infrastructure projects like these that had been at the heart of our economy before then.
We saw prices start fluctuating wildly during this time period, as steel companies tried to figure out what would happen when demand was low. Now in 2021, we see the price of steel climbing again.
Factors Contributing to Rising Steel Prices
The price of steel is still rising, and some people are asking why. Here are the main reasons for the increase in steel prices of late.
• Raw Material Costs
The prices of raw materials like oil, coal, and natural gas are all on the rise. This is especially true because steel manufacturers need these resources to produce their products. So when they have to spend more money for them, they're going to pass that added cost onto customers to cover the increase in expenses.
• Supply and Demand
The demand for steel products is one of the biggest contributors to price increases. This means that if more people want steel, manufacturers will have to charge more money in order to make a profit and keep up with increased production costs.
• Shipping Costs
Steel prices are also rising because shipping costs are increasing, resulting in higher raw material prices. This is because the cost of fuel goes up when raw materials are more expensive. The shipping industry also has to pay higher prices for steel, which means that they'll charge more money from customers who want their products delivered by boat or truck.
• Oil Prices
Finally, another factor contributing to rising steel prices is oil prices. The cost of oil is also going up, which means manufacturers will have to spend more money on it to produce steel, and that increased expense will be passed onto the customer eventually.
• Foreign Exchange Rates
The currency market has been volatile lately because many other countries are experiencing economic problems similar to ours, such as China. This means that the exchange rate on steel is going up because it's worth more in other countries.
• Price Hikes by Suppliers
Some suppliers have been raising prices without giving any notice to their customers. Unfortunately, these price hikes are just as harmful to manufacturers and builders because they're not able to cover these additional expenses with increased sales volume or profit margins - so they'll end up passing them onto the customer too.
The Impact of Steel Prices on Metal Building Costs
This is a problem that every metal building manufacturer should be dealing with because if the price of steel goes up even more, it will start to impact their bottom line. So they’ll either need to lower prices or find other ways of coming out ahead - and both options are bad for builders and customers alike.
Steel manufacturers have already begun to raise prices to account for the new costs, which means that metal buildings are getting more expensive. However, builders still need to figure out how they're going to get around this problem - because if prices keep rising, then there will be very few affordable options on the market anymore.
Saving Money After the Steel Price Hike
One way that builders can save money is by going with lighter gauge steel. This will reduce the cost of materials without affecting quality or safety, which means you'll be able to get what you need at a more affordable price point - and manufacturers will still make profit margins because they're using less material.
Another option for saving money would be to look into metal buildings on the market that are already pre-engineered instead of custom designs. These structures might not have all the options that builders want, but they should still offer an affordable solution compared to other products out there right now.
You Can Count on Probuilt Steel Buildings to Provide the Best Metal Buildings
We pride ourselves on being a company that you can count on for your steel building needs. We'll do whatever we can to keep up with the rising cost of steel, so be sure to contact us anytime if there's anything else we can help you with.
You can depend on Probuilt Steel Buildings, the leading manufacturer of metal carports, steel garages, metal barns, and other custom buildings across the US. Probuilt Steel Buildings only use steel made in the United States for our buildings.
Probuilt Steel Buildings offers competitive pricing, even amidst rising steel prices. We also offer financing options to make owning a steel building easier than ever. Contact Probuilt Steel Buildings today at (877) 754-1818 for more information and to request a free quote.