May 22 2008 2:25AM | Permalink | Email this | Comments (0) |
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Do a quick Google News search for “steel prices” and you’ll get a litany of stories reporting steel prices are rising all around the world, impacting nearly every sector. Steel costs continue to escalate--some types of steel have increased by more than 50% since the start of the year.

Take a look at the chart below. Yeesh.

Generally, steel and steel parts have experienced substantial increases since January 1, 2008.

According to a press release sent out by manufacturer First United Door Technologies, during the last six months the global steel market has experienced unprecedented price increases related to iron ore, coke, energy, transportation and scrap. This does not bode well for the steel garage door industry or for builders who have been dabbling in metal frame houses.  

Furthermore, according to First United Door, these input costs are expected to continue to rise sharply and the cost impact is compounded due to the demand of steel Asia and other emerging countries are consuming.  The BRIC (Brazil, Russia, India and China) countries will consume much more of the world’s steel supply than they have in past years, something akin to an industrial revolution...if that industrial revolution were on amphetamines. 

Short of a dramatic economic turnaround, it looks like steel is going to be another sector we're just going to have to tighten our belts in. I’m not sure what it’s going to take to get these costs down. There’s no such thing as cheap gas or resources any more, is there? 

I don’t pretend to know the solution or have the economic wherewithal even attempt to comment on where the industry could be heading, but check out these links for some more market insight:

Five Reasons Why Steel Prices are Rising and Lofty Steel Prices Could Keep Climbing