Since the Fall of 2020, the U.S. has seen significant steel price increases as steel has become low in supply. This steel shortage and, by consequence, its uptick in price has left a number of metal deck manufacturers struggling to fulfill orders and complete projects.
With the steel shortage predicted to continue, we wanted to share some information on what caused the price increases, the future of steel prices, and what you can do to manage your manufacturing projects during this time.
Causes of Significant Steel Price Increases
There are a number of factors that play into such a large increase in steel prices.
Metal Deck is manufactured using Hot Dipped Galvanized Steel Coil. At this time, lead times for the coil from the steel mills have increased from 2 months to 4-5 months. The steel mills are also at full capacity creating a supply shortage. Additionally, many deck manufacturers have a short supply of coil and are waiting on more supply from the steel mill.
Another factor is worldwide shutdowns caused by COVID-19. In 2020, as the world went into lockdown, steel mills closed up shop and halted production. When restrictions began to ease up in many parts of the U.S., construction sites re-opened, and the steel demand started to increase. Unfortunately, with a number of steel mills slowly reopening or remaining closed, the demand for steel has far outweighed the supply, meaning a shortage for steel buyers and a price increase.
Lastly, the recent increase in steel tariffs, which were enacted in 2018, has played a part in the steel shortage. After an investigation into the security of steel imports in 2017, a 25% tariff on steel was introduced in order to give American steel manufacturers a boost over foreign suppliers. This tariff, along with increased demand and small supply, has made it more difficult than ever for steel manufacturers to deliver steel products on time.
When Will Steel Prices Decrease?
Unfortunately, bank analysts predict that the price of steel will remain higher than usual in the second and third quarters of 2021. Reasons for the continued increase in costs include high demand, steep prices on scrap metal, soaring transportation costs, and supply shortage from the first quarter of the year. While the market remains in uncharted territory, it is unlikely that steel prices will drop until late 2021 or early 2022.
CSM Metal Deck Is Here to Help
At CSM Metal Deck, we have been supplying deck for more than 50 years. We understand that the market’s continued ambiguity has caused frustration and left many steel fabricators, roofing contractors, and other users looking for a new deck supplier. If you have found yourself in a difficult position due to the increase in steel prices, we are here to help.
We have been steadily increasing our steel inventory and currently have ample supply to meet our customers. We are still turning around the more common profile and gauges in 1-2 week lead times, and we can ship across the country.
CSM offers metal roof deck, composite deck and form deck. Contact us today to get started on your order.
For more on increasing steel prices and the future of the steel market, take a look at these resources: