Steel Shortages Shake Up Manufacturing, But Mark Unexpected Opportunities
Nearly every aspect of life took an unexpected turn as the COVID-19 pandemic took hold all over the world, and manufacturing was no exception. As businesses worked to adapt, they found themselves needing to respond to a critical shortage of steel supply and the resulting skyrocketing of prices.
Just who is taking the fall as the market makes this shift? As ubiquitous as steel is in manufacturing all over the world, the steel shortages and price surge have triggered an unprecedented domino effect. Businesses from across sectors and across borders have felt the impacts.
Appliance manufacturers, auto industry innovators, aerospace companies and many others all over the world have struggled to combat the effects of the change, for example. However, some have found ways to overcome the chaos and prevent their customers from bearing the financial burdens of the changes to the market.
For example, Twinsburg, Ohio’s own Copperloy, a go-to resource for steel yard ramps and other material handling solutions, manufactures high-strength steel loading dock equipment for companies across multiple industries. The current market trends may seem like cause for worry for business leaders, but Copperloy has what it takes to help logistics businesses of all kinds remain unaffected by the chaos.
The company’s vendors are offering “buy now” steel prices that can rise and fall by the hour. However, the professionals from Copperloy still commit to providing the right value to the customer. The Copperloy team manufactured a limited selection of yard ramps and other pieces prior to the spike in steel prices. Customers who act quickly and add a Copperloy steel yard ramp to their loading dock facility can maximize workspace productivity without feeling the impacts of the current steel shortage and price spike.
What is the Magnitude of the Steel Shortage?
How did global steel manufacturers arrive at the current market state? As the COVID-19 pandemic began its spread, several essential industries, such as automotive manufacturing, maintained a high demand for steel. Researchers pinpointed the start of the steel price spike to October of 2019. In January of 2020, the CRU, hot-rolled price per ton was $586. In January of 2021, this same figure stood at $1,065 per ton.
Another factor influencing the shift is the health restrictions for workers across steel mills worldwide. Decreased numbers of employees in these spaces have made a detrimental impact on product lead times. Many mills have moved to shut down as the virus continues to spread, further contributing to the current state of the steel market.
The starting price for hot-rolled steel has reached a 13-year high of $1,176 per ton in the month of February 2021. In addition, market researchers found unfilled steel orders hit a five-year high in the most recent quarter while inventories of steel fell to their lowest levels in 3 and a half years.
What Do These Trends Mean for Global Manufacturing?
Where do the tariffs come in? While the pandemic has sparked many efforts to increase support for American manufacturing and support of local businesses, in particular, and the movement of imports did slow amid the change, the market shift has pushed American steel prices 68% higher than those coming out of China. Even with current tariffs on foreign steel, imports still stand as the cheaper choice.
A shortage of shipping containers does buy American manufacturers some time when it comes to taking a proactive approach to the impacts of foreign steel.
Other factors such as a drop in steel supply on a global scale, delays at steel mills, a slow logistics pipeline due to the pandemic, all stand in the way of steel manufacturing companies in the United States.
Where Can Manufacturers Expect this Trend to Go?
Some researchers speculate that the trend will begin to reverse as a COVID-19 vaccine begins to become more widespread and plans for steel mills to reopen begin to move forward. However, if the pandemic does not shift as experts predict and if the market does not move as researchers speculate, foreign imports of steel could increase by June of 2021. It is possible that the high costs of raw materials could offset the impact of the current state of the steel market.
However, some experts predict that the steel supply shortage and the price increase will begin to reverse by the end of the first quarter of 2021. They observed the shift to a 30 million-ton hot metal capacity return since the month of October 2020. This has moved in tandem and with a rise in the opening of steel mills all over the world.
How a USA Based Manufacturer Is Dealing with the Steel Shortage
Twinsburg, Ohio’s own Copperloy is a go-to manufacturer of high-quality loading dock solutions. In fact, Copperloy will be able to honor existing quote prices on the company’s current inventory of edge of dock levelers, dock boards and steel yard ramps. Once the existing inventory is sold, Copperloy will adjust prices to accommodate the current volatility in the market price of steel, so order today!
Copperloy has been a top resource for steel yard ramps and other loading dock equipment for more than half a century. Are you ready to upgrade your loading dock and warehouse yard with equipment built by hard-working Americans? Visit the Copperloy website to learn about the extensive selection of steel yard ramps, dock boards, dock plates, and edge of dock levelers.