How Did COVID Affect 2021 Steel Prices?

February 2, 2021

What Influences the Price of Steel?

Steel is a global commodity that has a complicated pricing structure and just like gold and silver markets, steel price varies on a daily basis. Everything from the cost of the raw materials to fuel prices has a direct impact on the price of steel on a daily basis. 

Prices are influenced by other factors including:

  • Global Economy Health
  • Forecasted Supply and Demand
  • Industry Trends: auto industry, construction, packaging
  • Cost of Materials: Scrap metal and iron ore
  • Strength of the American Dollar
  • Natural Disasters and Pandemics  

 

Today’s Steel Price

Why Steel Prices Are Measured in Yuan

Trading Economics presents the price of steel according to the Chinese currency called Yuan. This is primarily due to the fact that China is the world’s largest producer and typically the biggest consumer of steel. To convert the steel price from the graph, simply use this currency converter to see the exchange rate between Chinese Yuan and American Dollar. Click here to see today’s chart for steel prices

 

What Happened to the Steel Industry in 2020? 

With the start of the COVID-19 outbreak, the world’s economy and specifically steel producers were affected. Surprisingly in China, their steel output increased by 4.9% making their industry largely unaffected by COVID-19 concerns. 

For the rest of the world excluding China, their steel industry outputs were significantly impacted. It is reported by World Steel that steel output fell in 2020 in the EU, US, Japan by about 20%, India decreased by 14%, and Korea was down 6% from 2019 production rates.

WorldSteel.org also shared that the COVID-19 outbreak provided a significant boost to both global technological progress and the green transition, which are the two main transformational forces of this century. Some countries announced “green recovery packages” that place supporting renewable energy development and decarbonisation technology development at the centre of their plans for economic recovery from the pandemic.

These will focus on : investments in energy efficiency and higher scrap steel use,  steel solutions for zero-emission mobility, smart & green buildings, solutions for climate change adaptation projects and infrastructure modernisation. Other efforts will be focused on increasing recycling efforts and how to make the overall steel production industry more sustainable.

2021 Price Forecast

Finished steel is forecasted in 2021 to increase in demand with an expected to growth of 8% and hit a four-year peak this year before falling as global demand stabilizes.

Pricing Factors: External Project Cost Influencers

When planning the cost of your building project, you have control over many factors such as the size, interior layout, additional features such as windows, doors and HVAC systems. External forces such as the state of the world economy, the strength of the American dollar and extreme events like global pandemics affect the price of steel.  Knowing the current facts will help you determine the right time to lock your steel building price.

Project Planning for the Best Steel Cost? 

As noted above for 2021 Steel price forecasts, the industry is expecting a price increase of 8% in early 2021 until the global demand stabilizes later in the year. This is because of the impacts of COVID-19; delaying projects and changing the normal supply and demand as timelines of projects were impacted in 2020.  

All these factors make locking in a building price at the current steel price the most important step in maximizing the value of your steel building project and planning. 


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Sarah Jameson

Director of Marketing & Content at GreenBuildingElements.com. Sarah holds a MBA in Digital Marketing Strategy from the University of Connecticut and a Bachelor’s Degree in Construction Management from Central Connecticut State University. Sarah is passionate about building a better tomorrow with green technologies and construction practices.

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