Steel prices are expected to rise sharply on January 4, 2021 due to a “double whammy” of an increase in base prices and significant scrap surcharge increase.
The estimated increase is expected to be about 9-10% on carbon steel grades and 6-7% on alloy grades.
This is a significant increase. That’s why Rolled Threads Unlimited is encouraging our customers to reorder now if they are running low on any parts in their inventory.
There are a number of reasons why steel prices are increasing, but the largest one is the imbalance between supply and demand. The following excerpt talks about why this is occurring:
“Steelmakers undertook substantial production cuts amid the Covid-19 pandemic, and both distributors and end-users allowed their inventories to be run down. As demand has started to recover, many steel buyers are needing to restock, but they are finding that the mills simply do not have the material available to sell, as demonstrated by ever extending delivery lead times.”
This article does a good job expanding on why prices are increasing.