Rising Steel Prices – The Long Story, Short

It’s no secret that construction costs are on the rise, with the upswing in the economy, an increase in the number of building projects, and an ever increasing global market, there is a direct correlation between the above mentioned factors and supply vs. demand. Globally, there has been a decrease in the availability of raw materials due to not only demand, but also the decreased output capabilities of some major suppliers, click the link below for an interesting read for more on this topic.

How does all this affect your building project?

  • In the past price increases were most often forecast with ample time for owners to make smart decisions in advance on when and how to move forward with their projects, as of lately the volatile market has experienced literally overnight price increases that makes it critical for decision makers to anticipate this as the new normal and be ready to act in order to maximize savings. A 10% increase in raw steel prices on a $1,000,000.00 project is and additional $100,000.00 immediate cost. As your steel building supplier, we do everything in our power to asses the markets and communicate closely with our factories to stay ahead of the pricing curve, and we always work with our clients to minimize the risk to your bottom line with timely information.
  • The size and design of your project is obviously another key factor affected by price increases. A project that initially uses 150 tons of steel may be a candidate for redesign with critical thinking that allows for a reduction in overall steel while maintaining the desired footprint. Everyone of our buildings goes through rigorous design process that allows for maximum efficiency that translates into cost savings for our clients.
  • Price increases on steel can have a dramatic effect on funding, especially for pending projects about to begin. Most lending institutions insist on the upfront costs to be known, and it is often a process to renegotiate with the banks when additional costs are incurred, even more reason to make sure your project is in production sooner than later after funding is secured and deposits are secured.
  • One more aspect of steel price increases is components. Prices for items such as doors, window frames, hardware are all affected by steel price increase. Yet another reason to secure your materials as soon as possible.

Price increases are the “new normal” in today’s economic times, at least for the foreseeable future. With that said, building with steel is, and will always be the best choice for commercial construction in both time and money. With proper planning and understanding the markets, along with a knowledgeable supplier, your project(s) will still be highly affordable and successful. We work hard for our clients to achieve success in every project we are a part of, call us today, and let’s get building!