The current state of the steel and metals market is due to many different factors here in America and around the world. This is not only an Allis-Roller issue, but more of a global supply problem that every business and consumer is facing.
For a dive into why this is happening we can first look at the events of the past year and COVID. During last year, the domestic steel industry essentially shut down. We also saw a sharp drop in demand for flat-rolled steel.
Since opening back up again for business, the demand has increased, and many mills have not been able to return to their normal production. Due to the mills being out of commission for so long, they are unable to fire up as quickly, which affects production as well. The industry is also currently going through some upgrades and several newer mills are coming online to replace them, which are not as profitable as the older mills.
To provide some context to this record high pricing in the steel industry, a normal price fluctuation in steel is pennies month over month. “As of August 2021 the price of steel is up 219% since Jan. 1, 2020. The benchmark price for hot-rolled steel hit $1,880 on Friday. Prior to the COVID-19 pandemic, it traded in the $500 to $800 range.”
“When things opened up and people had money to spend again, money that would have normally gone into travel or dining out soon poured into sprucing up homes with steel-intensive products like dishwashers and dryers. Plus, a pandemic homebuilding boom further increased demand for those appliances. That combination of elevated demand and low supply caused prices to soar.”
We’ve found that during this difficult time, the best way to continue to be successful is to have open communication with our supplier/partners and customers. Communication and setting goals are key to keep up with the rapid changes in the market. Our staff is dedicated to making sure all transactions are handled with care and are completed.
In the meantime, we’ll need to continue to be diligent and leverage our relationships to continue to provide exceptional service and maintain our reputation.
More reading at Fortune Magazine (paywalled).