My roomate, who is a general contractor,just told me about the new increases in steel prices.Concrete reinforcing steel(rebar),doubled in one day.Structural steel (I beams and heavy gauge steel)will double in price over the next thirty days.Lightweight steel(framing studs used mostly in comercial apps.),30%this month,30% next month and 40% the month after that,effectively doubling the price over the next 3 months.Even scrap steel is moving up smartly though I dont have numbers for that.I see this as another confirmation that base metal prices will continue to move higher in the near and mid term.
Steel prices
- Thread starter hollywood
- Start date
My family is in the development/construction business and they are local reps here in Houston for several major pre-engineered steel manufactures, two of which are Nucore and Star.
I've been told by both manufacturers that China is buying all of our scrap steel here in the US for their construction projects, leaving little for US-based steel manufacturers. The demand is so strong that it's causing extreme price increases in the US. Basically it's a supply/demand problem being caused by little or no control over scrap steel exports.
I'm not an expert in any of this but I believe the tariffs applied to prefab steel, not scrap. I'm sure someone on ET may be able to provide some more insight into this problem.
Kent
I've been told by both manufacturers that China is buying all of our scrap steel here in the US for their construction projects, leaving little for US-based steel manufacturers. The demand is so strong that it's causing extreme price increases in the US. Basically it's a supply/demand problem being caused by little or no control over scrap steel exports.
I'm not an expert in any of this but I believe the tariffs applied to prefab steel, not scrap. I'm sure someone on ET may be able to provide some more insight into this problem.
Kent
You've probably got more steel expertise than I will ever have (and I do not know anything at all about what, if any, Tariffs we might have on steel scraps), but one thing seems pretty clear. How can they buy scraps, melt em down and resell them cheaper than we can remelt em here? Seems like shipping them halfway around the world and back again would be much more expensive than just doing it here. Unless there is governmental interference, like regulations, overtime, welfare, unions, etc. that adds up. Have we really achieved the level of this stuff that is it cheaper to ship scraps halfway around the world, process them there, and ship them halfway around the world again? But then, it wouldn't surprise me much, many folks are clamoring for (and getting) socialism.
My knowledge on steel is no better than anyone elses,I dont think there are any futures or other derivitives that you trade on.I believe securities in steel companies is the only market available to us.I agree that China's consumption of this and other base metals is severely skewing the demand-supply equation.Within the last couple weeks the numbers Ive heard are, that currently China consumes approximately 33% of the worlds steel and 50% of the worlds copper production. I would exspect this trend to continue for some time,since they are in the early stages of becoming a economic super power and growth potential ,at this point seems almost unlimited.An other critical part of the equation is fuel and energy prices.Similarly this is the biggest exspence in almost all comodity prices.Mine the ore, truck it to smelter,(these trucks dont get miles per gallon, its gallons per mile),smelt the ore,(turning metal into a liquid state),ship the product to market.And the fuel prices hit the bottom line like a sledgehammer.I think its reasonable to assume that if the price of oil keeps going up that base metal prices will also. Is this getting out of hand or what?