Your Steel Building Specialist
Steel Building Price IncreasesUpdated February 2021
If you look at most any pre-engineered steel building quote, you will probably see a line that says pricing is valid for X number of days. Could be 5, 10, 15 days. You may ask yourself why the time limit on a quote?
Most people understand that steel is a commodity product which means the pricing of iron ore, carbon and the many other elements that make up steel are priced based on the current demand and which is one cause for fluctuations in the steel market. While the steel that makes up a building does not fluctuate day to day, market forecasting plays a role in the final pricing. The other big factor in steel building pricing is the demand for steel in and out of the building industry.
When the plants get orders in they typically create the permit drawings in a couple of weeks and then detail, plan, produce and ship the final product in the following 6 weeks or so. That's when demand is at a typical level. During the planning process they go ahead and buyout the steel needed for any jobs that are in house. This allows them to purchase the steel at current pricing giving them some cushion for the market swings. Again, this is how it works during times with normal demand.
As the demand increases, there are only so many jobs the plants can produce so the normal 6-8 weeks increases to 10-12 or even longer. That of course means more steel is purchased and increased demand drives the cost of goods up. This demand not only comes from the steel building industry, but from many markets that use some of the same products such as the automotive industry. 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.
Update January 13th, 2021
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.
Update February 16th, 2021
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.
The nice thing about knowing that steel building price increases are on the horizon is that you can go ahead and order your building at the current rates to hopefully beat the next price increase.
If you are in the market for a pre-engineered steel building, call us today or fill out our quick quote form. While we don't do high pressure sales, we are happy to work diligently to get your building ordered in a timely manner if you are ready to get your building on order.