If you’re considering a pre-engineered steel building to meet your structure needs, you might be concerned by news that the price of steel is rising. As Armstrong Steel explains, the rising cost of the raw materials that are used to make a product will obviously affect the final cost of the product itself.
There are other factors that can affect the price of steel, which will ultimately affect the price of final products that use steel in their construction. Luckily, when you work with an experienced company such as Armstrong Steel Buildings, you can rest assured knowing you’re getting some of the most competitive rates in the industry.
Below is a full explanation of what can affect the price of steel and why the material is still preferred for many building uses.
What Determines the Price of Steel?
As a commodity, steel is affected by the supply and demand for it. When there is high demand and low supply, prices tend to rise. When the opposite happens, prices tend to drop. This is true, of course, of just about any commodity.
The market for steel has changed significantly in recent years, though. Much of this is due to China, which has transformed the price of iron ore. In fact, because of the rising use for it in China, the global demand for seaborne iron ore has doubled in recent years.
As a result, price volatility began to spike. In turn, the traditional contracts between mining and steel companies that used to be set annually shifted to short-term agreements. The economic rebound in the United States and Europe has also resulted in recently volatile steel prices.
What Else Can Affect Steel Prices?
Global production of steel, as well as its supply and demand, are two of the most significant factors determining the price of steel. Again, like any other commodity, global production and current market conditions are also important factors.
But, one factor that is often overlooked is the price of oil and gas. Because iron ore must be
transported from mines to steel mills, and then the steel has to be transported from steel mills to steel manufacturers and then from steel manufacturers to end users, a huge cost line item for these companies is the oil and gas that powers the transportation.
In 2022, with oil and gas prices rising precipitously at times, steel prices were affected even more than normal.
What to Keep in Mind When Steel Prices Rise
Rising steel prices are naturally a concern for any entity or individual who wants to purchase a pre-engineered steel building. When steel prices rise, it’s important to work with a trusted company, such as Armstrong Steel Buildings, that will be around for a while.
You need to make sure you aren’t sending your hard-earned money to a broker. It’s essential you work directly with a metal building manufacturer that can be trusted to back up their guarantee to you.
While this is undoubtedly important at any time, and no matter what the price of steel is, it’s even more important when the cost of steel rises.
About Armstrong Steel
As a leading manufacturer of pre-engineered metal buildings, Armstrong Steel Buildings takes pride in delivering high-quality steel buildings across North America. Armstrong Steel Buildings has been delivering high-quality steel buildings for nearly twenty years and provides structures to residential, commercial, agricultural, industrial, cannabis, government, and military agencies.