Last Updated: October 15, 2021
Like many other building materials, steel is experiencing an ongoing period of fluctuation in price and availability. In an ongoing effort to keep our customers informed of recent market changes, we will be keeping this webpage up to date as any new developments arise.
If you have any questions or concerns about a potential or ongoing building project with Norsteel Buildings, please reach out to us directly and we will provide more details.
What is Causing the Price of Steel to Rise?
In the early days of the COVID-19 pandemic, steel mills around the world temporarily shut down production. At the time, many were expecting the economy to head into a recession or even a global economic depression, so production was tempered in expectation of this.
However, the drop-off in demand that many predicted never came. Instead, as millions around the world were forced to stay indoors many took to upgrading their homes. Funds that once would have been spent on travel and entertainment were instead funneled into new vehicles, barbecues, refrigerators, and other steel-heavy products like pre-engineered garages and workshops.
This temporary halt in production coupled with the increased demand for steel products caught the entire industry off-guard. As a result, since the beginning of the pandemic in March 2020 the price of steel has been steadily increasing; the benchmark price of steel has risen a staggering 215% since the beginning of the pandemic.
What is Causing Delays?
There are three main factors contributing to the lengthening of steel building project timelines, all of which stem from a lack of supply: supply chain shortages, logistics and transportation shortages, and labour shortages.
- Particular metal alloys – specifically G30 secondary material – have been in short supply and mills have placed customers on allocation. Norsteel is working with multiple suppliers to minimize the impact of this supply shortage.
- Galvalume® panel material – which is used for roofing – has been in particularly short supply across the industry as suppliers are facing record demand.
- Painted material and primer paint supply is limited as our suppliers experience key ingredient shortages. These shortages have led to missed/late shipments which in turn impacts our project timelines. Norsteel is working with multiple suppliers to reduce the impact of this shortage, and many of our suppliers are investigating alternative paint systems and ingredients.
- Liquid oxygen and argon gases are both used in the plasma cutting process for steel components. Across the entirety of the economy, liquid oxygen supplies are being redirected from industrial use to hospitals for medical use in the treatment of COVID-19. In addition, Hurricane Ida has damaged argon gas production facilities along the Gulf Coast, which is causing a slowdown in production.
- Norsteel’s fleet of delivery vehicles continue to operate effectively and on-time, but some of our suppliers are facing issues related to logistics. Driver availability, limited supply of trucks, and last-minute carrier cancellations and/or driver no-shows is impacting our suppliers’ ability to deliver materials on time.
- Many steel manufacturers around the globe are experiencing higher absenteeism because of COVID-19. This, combined with high demand for workers across the economy, is impacting many manufacturers’ ability to maximize their effective output of steel components.
What This Means for You
We are currently helping customers plan for mid-2022 building deliveries. If your building is a something you need to have in 2022, you absolutely should be purchasing a building now.
This is not a sales tactic; it is the current reality of the industry.
We recommend that you reach out to us as soon as possible and begin speaking with one of our Building Consultants. We will provide your engineered drawings now so that you obtain building permits in a timely manner that will not hinder the construction phase of your project next year. We are also advising our customers to prepare their foundations now so their buildings can be assembled as soon as they arrive.
Regardless of what stage your project is in, we assure you that our team is working tirelessly to find you the best solution, the best pricing, and the best delivery times possible
- If you are considering a purchase, please make sure you are speaking with one of our expert Building Consultants regularly to check the status of your building quotation. Depending on how long ago you received your quote, the cost of your project may have changed.
- If you have already purchased a Norsteel Building, depending on the complexity of your project, it could take anywhere from 4 to 12 weeks to receive your engineered drawings. Our EasyBuild structures are the exception with permit drawings available in 2 weeks’ time. Regarding delivery times, please keep in contact with your Norsteel Consultant for up-to-date information.
At Norsteel, we are working tirelessly to keep our customers and contacts up to date on the changing market conditions. We have already provided four updates via email but moving forward we will also update this article with any new information that becomes available.
Again, please reach out to us directly at (866) 971-7575 if you have any questions or concerns. Norsteel has several manufacturing plants at our disposal, and our team will work with you to minimize costs and timeline impacts as a result of these broader market circumstances.