One might be surprised to hear that steel prices are predicted to climb drastically after declining for the previous 15 months leading into 2017, but that is exactly what can be expected. Steel prices are currently the highest they’ve been since the summer of 2011 and this is of no coincidence. There are many factors that contribute to this upward trend.
Chinese Production Projection
China is the world leader in steel production. China has been producing steel at an alarming rate over the last two decades and due to this increase in production, the supply of steel has been much higher than the demand, leading to globally cheaper steel prices. These low prices have long fractured the steel industries of the U.S., Japan and the United Kingdom, but not for much longer. China has announced that they will slow down their steel production by 2020 by 20% which translates to over 165 million tons.
For the first time in decades the supply will be greater than the demand for steel which will naturally lead to higher prices. This will open up the doors for countries such as the United States to produce more steel to meet the domestic and global need.
Industrial Metals Upward Trend
The steel prices have somewhat mirrored other industrial metals when it comes to an upward trend in pricing:
Aluminum prices have been climbing since October 2016
Zinc and Tin prices have been climbing since January 2016
This is all occurring while the price of gold, silver, and other precious metals are trending downward. Even less desirable metals like copper have been slowly increasing in price which can leave one to believe that steel will continue to follow suit.
General Steel Buildings has forecasted the price of steel to rise to $395/ton in 2017 and $430/ton in 2018, allowing for the many markets that have been living in the shadows of China to emerge and thrive.
At Avion Alloys, all of our steel is fully certified by U.S.producing mills. We are a NASA-approved vendor serving a variety of industries locally and globally. If you have questions about any of our steel products or would like to receive a quote, contact us at (800) 408-2329 or visit us online.