Steel prices have dropped 33% since the end of 2021, but are still double pre-COVID prices
Last November (2021) we wrote about the massive increase in steel prices that has affected the fabrication industry. Beginning roughly in November 2020, steel prices increased dramatically, with costs peaking at 2.5x pre-COVID levels by November 2021.
Since then, OSH Cut's costs for steel have dropped 33% from their peak at the end of 2021. Prices are sitting now at 2x previous levels: still much higher, but the easing we've seen so far is encouraging.
Shown above: OSH Cut's steel costs / lb increased to a peak of 2.5x pre-COVID levels by November 2021, and have since stabilized and dropped to rough two times previous levels.
A number of factors likely influence the recent decrease in pricing, including reduced steel production in China, reduced iron ore commodity prices, new capacity from mills, and easing of supply chain issues.
One likely contribution revolves around manufacturing buying behavior. Many operations, including OSH Cut, foresaw the impending steel shortage and increased internal inventory to smooth supply-chain speed bumps. It's hard to keep fabricating metal if you can't get the raw material. That likely had the ironic side-effect of exacerbating supply problems and further increasing prices.
Now that the world appears to be settling down, many companies - including service centers and fabricators - are stuck with excess steel purchased at a premium, while prices continue to drop. OSH Cut has fortunately been able to avoid carrying too much stock, so as steel prices drop, our prices will follow-suit.
It's uncertain just how much steel prices can be expected to return to normal levels, if they ever do. But OSH Cut will keep an eye on prices and pass savings on to our customers as quickly as we can.
