Rising Steel Prices in the United States
A recent issue within the material handling industry is rising steel prices. Because steel is a global commodity, industry prices are always changing. Consumers are often unaware of fluctuations in steel prices. In 2016, steel prices started rising due to global factors such as the strength of the US dollar, natural disasters, and increased demand for steel.
Additionally, as a result of coal prices increasing steadily since July, steel companies have no choice but to raise the price of steel. Since economists forecast that steel prices will be on the rise over the next few years, it’s important for U.S. steel buyers to be informed and adjust budgets accordingly.
Rising Steel Prices
History of Steel Prices
Over the past few years the steel price has been relatively low. The price of steel peaked around 2011 at $749.60 per tonne, and gradually fell for a few years after that. In 2015, price per tonne bottomed out at less than $500 and then prices began to rise again. This is due to a decline in supply coming from China as steel mills are reaching capacities, while at the same time the global demand for steel increases. They are expected to continue to increase at least through 2019. The following graph gives a picture of the change in steel prices since 2010 and forecasts future change over the next few years. As you can see, prices are expected to continue to increase for a while.
How does this affect the Material Handling Industry?
So far, 2016 has been strong for steel demand, causing prices to go up. Within the material handling industry, increase in steel prices affects the prices of warehouse materials such as yard ramps, pallet racking, ladders, mezzanines, and more. Businesses purchasing large quantities of steel products should be aware that the price will only continue to rise over the next few years.