People are scrambling for material.”Īnother factor: Consolidation. Most people in the market see strength through the third quarter, and some don’t see it getting better on the buying side until 2022 sometime,” Schier says. “I don’t think we’ve hit the peak for steel prices. Instead of paying for experiences and vacations, they were buying a new lawn mower, buying a new car, or white goods like appliances-which are steel intensive,” Thorsten Schier, a metals expert at Fastmarkets, tells Fortune. “What happened, which is similar to lumber, demand during COVID-19 was stronger than first anticipated because of switches in consumption patterns. That quick rebound caught steel mills off-guard. Soon, steel-heavy products like grills and refrigerators were in high demand. Early in the pandemic, stuck at home Americans rushed to spruce up their abodes. But that drop-off in demand didn’t last long for iron ore. What’s going on? During the early months of the 2020 shutdowns, many steel mills shut off production in fear that we were headed into a deep recession-maybe even a depression. Prior to the pandemic, it traded in the $500 to $800 range. The benchmark price for hot-rolled steel hit another all-time high last week, climbing to $1,825. Since March 2020, steel prices are up a staggering 215%.
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