National Steel Inventories at Lowest Point Since 2004
Demand for steel is outpacing production, causing price and supply volatility
SMART OFF-SITE CONSTRUCTION provides Cost Certainty in an uncertain market
What you can do to secure pricing and availability
COVID-19 has impacted supply chains worldwide, most notably medical PPE, hand sanitizer and toilet paper. In fact, the World Trade Organization is projecting world merchandise trade volume will drop as much as 32% in the 2020-21 time frame. Recently, the steel industry has started to feel those affects, with national steel inventories at their lowest point in 16 years (2004). The reasons?
Steel production dropped in the 2nd quarter of 2020. Fortunately, this reduction had not been felt due to a number of factors.
But now, increasing demand coupled with slower-than-expected production ramp up by steel mills has buyers competing for limited inventory.
This trend is projected to continue into 2021 due to a number of causes. For example, a resurgent coronavirus outbreak at the ArcelorMittal Mill in Burns Harbor (60 miles from Chicago) was expected to add to production woes.
Obviously, MODLOGIQ projects may be affected due to our use of structural steel as part of our SMART OFF-SITE CONSTRUCTION and “Build Together” methodology. To date, we have been able to manage volatility in the structural steel supply chain. We maintain daily communication with our providers and will continue to closely monitor the situation.
HOW YOU CAN ACHIEVE COST CERTAINTY IN AN UNCERTAIN STEEL MARKET…
Customers with executed contracts. The SMART OFF-SITE CONSTRUCTION process allows us to procure steel supplies at agreed upon rates, protecting customers from swings in availability and pricing once design is finalized. This is just one way we deliver on our promise of Cost Certainty.
Customers with existing proposals. We recommend that you contact your MODLOGIQ Technical Sales Representative to review pricing. While we’ll make every effort to protect you against changing costs, we may have to adjust based on evolving market conditions. Your best course of action? Commit to a contract as soon as possible to avoid potential future price increases.