All You Need To Know About Steel Price Trends in 2021

Amid the global pandemic and economic recession, the year 2020 has been replete with unexpected surprises. Despite being slowed down initially, construction ramped up with the uplifting of the lockdown. As the economy reopened, the price of certain commodities soared including prominent industrial metals such as steel. Taking price forecasts for steel in 2021 as an indication, this might be a fruitful year for the construction industry. There are many factors that have affected the steel rate today. Let’s have a look:

 

Factors That Impact Steel Prices

Factors contributing to an increase in steel prices and leading to the steel price today:

• Raw material costs: Iron ore being a key steel component has a direct impact on steel prices. Both mining operations and seasonal fluctuations determine the iron ore price. 
• Supply and demand: When it comes to steel, the supply and demand are inversely proportional i.e. the supply is lower when the demand is high and vice versa. High demand leads to an increase in price. 
• Shipping costs: Steel price is also impacted by the cost of shipping materials including the shipping route and the cost of fuel. 
• Oil prices: Oil and steel prices follow a similar pattern. Shipping raw and finished materials are cheaper when the oil is cheap. 

 

Steel Prices During Pandemic

COVID-19 pandemic led many industries to experience setbacks and the steel industry is no exception. There had been a worldwide halt on the manufacturing of steel, owing to the lockdown and shutdown of construction projects. This led to steel supply tightening and prices getting increased as well. 

 

2021 Steel Industry Projections 

2021 witnessed recovery and the steel prices have been rising still. While they are expected to remain at an all-time high during the first quarter of the year, a downfall is expected later on. 

Thanks to the rapid recovery and the lifting of lockdown, there has been more focus on the production and distribution of steel post the first quarter of 2021 due to the following reasons:

• Refilling of service centers
• Lesser demand and more emphasis on production
• Seasonal changes

 

How Rising Prices Will Affect Your Construction Business  

When it comes to businesses, there are many factors affecting the bottom line including insurance fees, equipment costs, payroll expenses, insurance fees, taxes, and more. When using steel which is an indispensable part of the construction, steel price today could also be one of the crucial factors. Rising steel prices add up to the overall upfront costs and must be considered while preparing the budget. This also means that you must keep additional money for any unexpected expenses that may arise to prevent an unfortunate situation. Cash flow issues can lead to project delays and other obstacles. 

 

Trust BuildSupply – Your One-Stop Construction Material Procurement Partner!

Construction materials including steel account for 60-70% of the total project cost. Challenges such as high lead time, inefficient price discovery, etc. can further add to the trouble. Keeping all of this in mind, BuildSupply was launched, a unique platform where all the major construction and building materials can be procured easily with transparency.