5 Factors that Influence The Price of Steel
Steel, a global commodity, is subject to fluctuating prices. As a competitive market, steel prices generally remain stable over time. However, shifts in supply and demand can significantly impact the cost of constructing a new metal building.
Several factors can influence steel prices. Understanding these factors will help you anticipate potential cost fluctuations and make informed decisions about your metal building project. Let's explore the 5 major factors that can increase steel prices and how they may impact the final cost of your custom metal building.
Cost of Raw Materials
The production of new steel relies heavily on iron ore and scrap metal. Iron ore prices fluctuate based on mining, refining,and transportation costs. The availability of scrap metal, influenced by demolition rates, can also impact steel prices.Increased construction activity can drive up steel prices due to limited supply. As a result, companies may raise prices for steel products, affecting everything from soda cans to automobiles.
Weather
Steel prices can be volatile due to weather-related disruptions. Storms and natural disasters affecting shipping routes can drive up costs, as transportation becomes more challenging.
Oil Prices
Oil prices significantly impact steel prices due to international shipping costs. When oil is cheap, steel imports become more affordable. Conversely, rising oil prices lead to higher steel prices due to increased shipping costs. This correlation is evident in the simultaneous fluctuations of oil and steel prices over time.
Supply and Demand
Steel prices are on the rise due to a global shortage. Tariffs imposed by the US and EU have reduced Chinese steel exports, while domestic production hasn't ramped up enough to meet demand. This imbalance is directly impacting the cost of steel buildings.
Tariffs
Tariffs have increased the cost to import steel to the U.S. from other countries including Canada, Mexico, and China. These tariffs were put into place to protect American Steel Manufacturing Plants and to keep U.S. steel prices competitive in an international market.
It's a common misconception that steel tariffs only affect builders who use imported steel. Even companies using 100% American-made steel often see price hikes soon after new tariffs are announced.
Shady business practices can inflate steel building costs. Some suppliers advertise low material prices, only to add hidden fees later to offset rising steel costs. This deceptive tactic lures customers with seemingly low quotes before revealing additional charges. To safeguard yourself, secure a fixed quote for your building before construction begins with Raeco Builders.
At Raeco Builders, we have over 23 years of experience in designing and constructing high-quality steel buildings for clients across South Dakota. Here's what sets us apart when it comes to building your steel structure in Watertown:
Local Expertise: We understand the specific building codes and permitting regulations in Watertown, ensuring your project complies with all requirements.
Full-Service General Contracting: We handle every aspect of your project, from initial design consultations and permitting to construction and post-construction support.
Commitment to Quality: Our team of experienced professionals works closely with you to ensure every detail is addressed and that the final product meets the highest quality standards.
Pre-Engineered Building Expertise: We specialize in pre-engineered steel building solutions, offering a wide range of options to meet your specific needs and budget.
Ready to build your dream metal building? Raeco Builders offers expert design-build services to ensure your project is a success. Contact us today for a customized estimate and experience the difference.
Contact Raeco today for a consultation on your next project.
Main Office: 605-271-0897
Toll Free: 877-59-RAECO
Email: info@raecobuilders.com