Steel Prices Forecast for 2024: See Analysis & Prices

Introduction

Building with steel is a very popular choice in the world of construction today. With steel, you get a highly durable, long-lasting building material, and one that is often quite simple to construct with. In this article, we’re going to focus on one relevant aspect to your steel construction project – the price of steel.

By now you know that steel prices, along with building design and size, play a large part in determining the cost of your steel building.

While you have some control over this, one thing you cannot influence is the price of steel itself.

Steel prices fluctuate depending on a variety of factors including cost, supply, steel demand and raw materials demand, as well as the current global steel market, tariffs, and trade policies between the US and other countries.

In fact, between November 2020 and 2021, steel prices fluctuated between $380 and $640 per short ton before settling at around $500.

In This Article

In this article, we will cover all these factors and more. We will help you understand global steel prices, steel consumption, and how these factors work to influence the value of steel. Essentially, you will understand the larger forces at play which influence the price of your steel product.

We will frame all this by focusing on the factor most relevant to you – how much you can expect to spend on your steel.

You’ll benefit greatly from learning more about current trends and future forecasts of steel prices, including what affects these costs.

Let’s get right to it.

What’s in this guide?

Steel Prices Forecast

An understanding of the price of steel requires an understanding of the steel market in general, specifically on a global scale. This is much too complicated to fully overview in this article, but we can give a general outline of how it works.

Over the years, world crude steel production has increased rapidly with 1.8 Billion tonnes produced in 2020, according to The World Steel Association.

This was a significant 4.6% increase from the previous year, which alongside current economic growth trends, suggest a positive outlook for future steel production.

What does this mean for steel prices?

Simply put, if the supply of steel increases faster than demand then prices will decrease.

But the reality is never as simple as suggested by economic models.

There are other factors such as climate change initiatives that could easily have a more significant effect than the forces of market supply and demand.

For example, new production methods that are more environment-friendly may be implemented which would help reduce steel’s contribution to climate change.

At the same time, this could increase the associated costs and as a result, spike up steel prices.

Basically, the steel market, like the market for any commodity, is not fully predictable. Numerous market forces work to influence the economic activity surrounding steel, and we will outline some of the major ones next.

So what are the factors that influence this change in steel prices?

Let’s find out.

What Affects Steel Prices?

As mentioned above, there are many factors which influence steel prices around the world. Many economic forces work to influence the price of steel. This is why the price of steel, like any commodity price, is impossible to predict with exact precision. However, if we have an understanding of the various forces which act to influence the price, then we can get a decent understanding of the steel market.

After all, your most likely concern is the actual price of steel, so having this general understanding is good enough for most people’s requirements. Here are many of the top factors which influence the steel market:

Cost of Raw Materials

• Iron Ore and Scrap Metal are the main components of steel
• Their prices largely determine the value of producing steel and its price

Since steel goes through its manufacturing and refining process to become usable, the materials involved in this process help determine its amount.

Supply and demand for iron ore and scrap metal determine their prices, which is consequently transferred to steel prices as a cost of production.

Additionally, prices for these raw materials typically fluctuate between seasons depending on when their high and low production seasons are.

Supply and Demand for Steel

• Industrial Production and Economic Growth are general indicators for essential metals such as steel
• The US imports steel from significant suppliers like China
• Supply and demand for steel differs globally, regionally, and locally

Economic growth goes hand-in-hand with increased production and output.

This usually requires more material, such as steel, to cope with the high level of growth.

Therefore, during an economic boom, you can expect to see steel prices increase as demand overtakes supply.

For instance, when China and other Asian economies experienced industry developments in the early 2000s, the demand and price of steel increased. This also caused a global shift in supply and demand from the US to Asia.

Moreover, the import costs of steel also determine its price. If this becomes too high, then demand would decrease which translates into a price reduction.

China alone accounts for about half of the entire world’s steel supply. So it’s safe to say that they have a significant amount of control over import costs.

Global Markets

• Performance of steel in the commodities market determines its price
• Investor perception greatly influences steel prices
• Stocks of steel producers can indicate the health of the steel industry

Steel, as well as its components, is traded in the commodities market and are subject to investor speculation.

Their prices regularly fluctuate depending on the perceived risk, as well as recent news regarding the steel industry. After all, so much of the market is about perception, and not actual risk, as it is often impossible to understand the exact current situation of the market.

Furthermore, the stock performance of the largest global and US steel producers can act as a useful indicator of steel prices. If their stocks go down, this may translate into a supply decrease and price increase.

Top steel suppliers such as ArcelorMittal SA, Baoshan Iron & Steel, and US Steel showed a gradual decline in the past year. However, this could directly be attributed to regular trend fluctuations, since it is not a substantial decline.

USD Strength

• Stronger USD means that steel imports and prices become cheaper

When the USD appreciates and strengthens against other currencies, imports become relatively less expensive.

Since the US is the world’s largest steel importer, a stronger USD would translate into a lot of cost-savings.

Climate Change

• Steel production causes a large portion of global CO2 emission
• Increasingly significant climate change initiatives may force suppliers to find more environment-friendly production methods or reduce supply

Climate change is an immediately pressing matter that is primarily attributed to global business practices. In 2020, steel production accounted for 7-9% of the global total of CO2 emissions.

What this means for steel suppliers is they’ll soon face pressure to find less harmful ways to produce steel, or else be forced to reduce their supply.

If their production costs increase due to having to use more environmental-friendly but costly production methods, then steel prices will rise.

Unpredictable Events

• Unpredictable events such as natural disasters and war can have a devastating effect on steel prices

There are things that no one can foresee, such as natural disasters or wars.

Of course, the current coronavirus pandemic also falls in this category. This has devastated the markets in many areas, and makes the prices of certain commodities very difficult to predict. It did impact the price of steel very hard, causing a drop initially, and it is difficult to predict how exactly this will play out.

These events can easily affect many industries including steel, as well as others that require steel in their production processes.

Putting It All Together

Of course, the true price of steel is determined by a combination of all these factors and more. So how do you put these factors together to accurately predict prices?

The truth is that, like so many factors in the market, no one can accurately predict the prices with perfect precision. However, with an understanding of the different factors and influences, then you can have a better idea than ever before of how the marketplace works.

Of course, if you are simply interesting in the price of steel because you use it for a building material, then a general understanding is all you need anyways. If you follow the market for steel, then you will know when the price is low and you will know when it is a good time to stock up on materials for your building projects.

What is the cost of steel?

While the cost of steel frequently fluctuates, so it’s hard to give a definitive price, see the table below for details about how much you could expect your steel to cost.

These prices come from general cost estimates for early 2021.

Type	Price	Quantity
Bright & Shiny	$2.35	per pound
Insulated Wire #1 (NO Romex)	$1.45	per pound
Insulated Wire #2	$0.50	per pound
Stainless Steel (clean)	$0.25	per pound
Sealed Units	$0.14	per pound
Electric Motors	$0.18	per pound
Lead	$0.50	per pound
Battery (Lead Acid only)	$0.25	per pound
Shreddable Steel	$115.00	per net ton
#1 Prepared Steel	$135.00	per net ton
#1 Unprepared Steel	$110.00	per net ton

How much does it cost to build with steel?

Building with steel can also vary in price because the cost of steel changes often; however, there are some basic guide prices.

Size	Price
30×50	$13,900-$16,000
50×100	$35,000-$40,000
100×100	$75,000-$83,000

Current Analysis

Steel prices fluctuate quite widely and do change in response to many market factors. There can quickly be significant changes in pricing.

For example, the highest price was around 4,800 in September of 2021, but then prices plummeted to below 3,600 in as short a time as December of 2021, a mere three months later.

This is why locking in prices for your steel building could be essential in keeping your costs low, due to the unpredictability of the market.

Top 5 Global Steel Producers

1. ArcelorMittal

Type: Steel producer

Location: Luxembourg

ArcelorMittal was created from the merger between Arcelor and Mittal, and currently, produce around 10% of all of the steel in the world.

Distributing to 18 countries around the world, their sustainable steel will go towards industries such as the automotive sectors, appliances, research and development as well as technology to name a few.

A clear leader in the steel industry, their focus is now on becoming the safest steel producer and mining company in the world.

2. China Baowu Group

Type: Steel producer

Location: Shanghai

The China Baowu Group is one of the largest steel companies in China, and produced over 65.39 million metric tonnes of steel, making it also one of the biggest producers in the world and part of the Global Fortune 500 companies.

They claim to have a bright future of profitability and a lot of growth potential, producing products for manufacturing and technology.

3. Nippon Steel & Sumitomo Metal Corporation

Type: Steel producer

Location: Tokyo

With over 50,000 staff on a global scale, Nippon Steel & Sumitomo Metal Corporation is Japan’s largest producer of steel and was reported to produce around 48 million metric tonnes in 2020 alone.

In response to the competitive industry, they are aiming to become the best steel producer in the world by focusing on their technology and global logistics.

4. HBIS Group

Type: Steel producer

Location: Shijiazhuang

The HBIS Group is another one of China’s biggest steel producers, turning over a total of 284.5 CNY in 2019, 45.5 million metric tonnes of steel in 2020 and they have been a part of the Global Fortune 500 for ten years consecutively.

With various acquisitions planned, HBIS are planning to continue growing and currently holds over 70 companies globally.

5. Posco

Type: Steel producer

Location: Republic of Korea

Posco is a republic of Korean company which has been around since 1968, which produces around 42.19 million metric tonnes of steel in 2020.

They sell steel to over 53 countries worldwide and aim to produce steel to industries including the development of technology and electrical steel.

In 2020, Posco reported revenue of $53.6 billion, making them one of the biggest steel companies not only in Asia but also in the world.

Conclusion

Thanks very much for reading our guide on the steel market and on forecasting steel prices. As you can see, the steel market is far from a simple area of expertise. There are many factors and forces which influence the price of steel, and many considerations to undertake when trying to predict the price of steel in the future.

Whatever your reasons for understanding the steel market, it is best to accept that no market is a perfect science. An understanding of the steel market will allow you to understand why steel prices are the way they are, but it is impossible to predict the future with 100% precision. We hope this guide has helped you to gain a clearer understanding on this often-unclear area of steel construction.

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