Looking at hot rolled coil steel pricing, it would appear that we have finally seen the peak with pricing beginning to settle back down.  In August it hit a high of over $1,900 and is now hovering around $1,600 per tonne. Barring any major changes in the domestic and international markets, hopefully the prices will ease back down closer to what we have seen in the past.

So why isn't the price for steel buildings falling as well?  In time it will follow, but for now there are still a few factors that continue to keep prices up.  First is that the pricing for the coils of hot and cold rolled steel are just that, coils.  They still have to be converted to all the parts and pieces that make up a steel building.  First some coils have to be coated and then they have to run through the forming machinery to create panels, trim, and structural members.  Obviously this is a simplified explanation as there are many steps involved as well as shipping and handling to get to the different processes.  Second is how a steel building is produced.  As an order goes through the process, a building gets engineered, detailed and scheduled for production.  Steel for that building is purchased weeks or even months ahead of the actual process of fabrication.  That means that while you see prices changing today, it could take many months for those changes to trickle down into the process.  The last factor (which is certainly not the least) is the tremendous activity that has been happening in the steel building industry over the last 1-2 years.  Strong demand created many orders for pre-engineered steel buildings as well as for structural steel designs.  Over these last couple of years we have seen lead times of 8-10 weeks change to 20-30 weeks and sometimes even longer.  Depending on our supplier we are still seeing lead times from 16 weeks up to around 30.  Until all of these orders are completed and delivered, pricing from the plants will continue to adjust according to supply and demand.  Hopefully in 6-9 months we will start seeing some relief on lead times which may lead to some favorable pricing adjustments.

Steel demand continues to outpace production capacity into August.  This continues to push the cost of raw materials higher which, along with capacity constraints increases the overall cost of any goods made from Steel.  Pre-engineered steel buildings obviously rely on those materials as well as costs to convert raw steel into the variety of pieces that make up a building.  We are still seeing shortages on finished materials keeping lead times much longer than normal.  In addition are the rising fuel costs along with a shortage in man power in the trucking industry leading to even more delays along the process.  We are still seeing good demand driving price increases across the industry.

Yet again, the industry continues to push higher in steel pricing.  Domestic hot rolled coil steel took another jump in June to nearly $1,800.  That is up over 200% compared to the closing price of $550 back in September 2020.  As you can imagine that translates into a considerable increase in any industry utilizing steel.

As steel demand exceeds production, we expect this trend to continue.  Not only does the demand drive pricing, but it has also created shortages that make orders difficult to fill as material lead times increase and some go into allocation.  These lead times and allocations affect every aspect of our industry much as it does for all industries competing for the same coils of hot rolled steel, cold rolled steel and plate steel.

Pricing on steel products such as hot rolled steel coils continue to push upward.  The overall trajectory for a wide variety of steel products is still on a steady rise from where it was back in September/October of 2020.  This commodity item along with many other components make up the base for products consumed in a pre-engineered steel building which gives you a good indication of where the pricing in the market is heading.  Add to that an imbalance in the trucking industry leading to more loads than drivers available.  Not only are the cost of goods rising, so are the costs to transport both raw materials and finished products as well.

While we thought the industry would be leveling off at this point, there seems to be no end in sight for this upward trend (at least not yet).  In fact, building deliveries have been pushed out to 26-29 weeks depending on the plant location.

Price increases have yet to affect demand, so we continue on watching the steady climb and plant schedules staying full.

Steel commodities continue to hold strong into February.  Hot-rolled coil steel continues it's push upward as do other components used in a pre-engineered steel building. Similar increases can be seen in traditional building materials as well.  Strong demand and supply chain disruptions due to Covid related illness and contact tracing continue to push prices higher.

From the info the plants have shared with us, this trend shows no signs of slowing down still.  Building deliveries have been pushed out to 26-30 weeks depending on the plant location.

With many customers looking to beat each price increase, the orders in house continue to fill the docket with even more orders.  The plants are working hard to continue to forecast and allocate all the steel needed to complete each order.

As you can see from the chart, the upward trend of steel product such as hot rolled steel coils continues.  The jumps we were seeing in September and October have been surpassed by the increases in November, December and January.  From the info the plants have shared with us, this trend shows no signs of slowing down just yet.  In fact, building deliveries have been pushed out to 16, 18 and even 20 weeks depending on the plant location.

As the orders continue, the demand continues and the supply side is having trouble keeping up.  That of course means that prices should continue to rise.  Even if demand slows, it will still take many months for prices to level out as the plants will need to work through completing all the orders currently in house.

For instance, you can look up the market price for Domestic Hot-Rolled Coil Steel to see that in just the last month alone prices have increased approximately 17% from $550 to $645

So where are we now?  Well, as of the week of October 26, 2020, demand has been intense.  Steel building sales during late Summer and Fall of this year have been steadily increasing and show no signs of letting up.  Our plants have been keeping us updated on shipping forecasts and we are now exceeding 12 weeks to deliver a building.  As we saw the delivery schedule increasing we knew what would be coming next - price increases.  We have a steel building price increase coming up on November 1, 2020 and have been getting information indicating more increases to come in the next month or two.