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Price of steel rapidly increasing
October 2021

Price of steel rapidly increasing

The lack of supply for steel has US companies scrambling to produce cans, metal desks and filing cabinets, Peloton bikes and cars as prices have shot up to $1940 a ton this September compared to $560 for both 2019 and 2020. A US government index tracking steel and iron saw an unprecedented relative increase of nearly 100% increase this August compared to 2020. Manufacturers have stated that the demand for manufactured goods has remained high, despite tariffs on imported steel implemented by the Trump administration and continued by the Biden administration resulting in higher steel prices, passed on directly to the consumer. Looking to the future, US steel producers have invested in newer, more efficient mills that produce steel with lower operating costs, which should result in lower costs for consumers as older, high cost mills are gradually phased-out. Such new mills are expected to increase annual domestic sheet-steel production by some 15%. In the meantime, companies are hedging against future increases by creating multiple orders stretching to delivery in 2022, as opposed to their previous practice of ordering a few months in advance.