The price of steel is projected to rise in 2016 – begging the question, “How will this affect the cost of steel buildings?”
Anyone that has been around this industry long enough knows that the looming threat of the dreaded “price increase” is a common sales ploy. It’s not uncommon to hear a sales rep feed you lines like, “This is last day you’ll be able to get this price!” for steel or a building they’re saying won’t be there tomorrow at that price. This is done to create a sense of urgency that motivates you to buy now.
So… is that all this talk about rising steel prices is? The short answer is no. There’s really some substance to this one. Here’s why.
Economists Actually Are Predicting a Steady Rise in Steel Prices for 2016…
The steel industry had been on the decline in recent years. American steel manufacturers attribute this decline to the global market being oversaturated with cheap steel from Asian markets. In fact, steel prices bottomed out in 2015. But experts like worldsteel.org and knoema.com are projecting the price of steel will rise from 2016 through 2019.
Why is this? The standard explanation is many steel manufacturers in China weren’t built to stay in the game long and are filing bankruptcy. This is lowering the supply of the “cheap steel” that to this point has artificially brought down the price of the higher quality American steel offered here at Steelsmith. Since construction projects globally are on the rise, and the demand for steel is higher than it’s been in over a decade, customarily increased demand + short supply equals higher prices.
How Will This Impact Pricing for Spring Construction Season?
Spring weather naturally brings with it an increase in construction projects while winter months are notoriously slow. This is why you can typically lockdown the best price for a prefab steel or metal building for the spring at the tail-end of the preceding year – as well as the beginning of the new year – when both demand and pricing are lower.
Once springtime construction projects kick into gear, demand is higher, manufacturers and contractors get super busy, and the cost of a prefabricated steel building tends to go up.
So what happens when this customary rise in spring construction meets this anticipated steel shortage? The cost of steel buildings should rise, right?
While we can’t predict the future, here’s what we can tell you. In Steelsmith’s case, we’re locked-in price-wise with our American steel suppliers and we’ve been allotted enough material through the first quarter of 2016 to keep our prices steady for now.
Therefore, if a steel building is part of your plans within the next year, this may indeed be your best chance to take advantage of 2015’s record-low steel prices. This means you can ensure your project is on-time and on-budget by ordering now and getting locked-in at today’s pricing. However, the window of opportunity to lock in a great price is seemingly getting smaller with each passing day.
The Time To Save Money is Now
Timing is everything. All signs point to this being the best time to buy a prefabricated metal or steel building. Try locking in a price right now while you can still reap the benefits of 2015’s pricing. That said while the cost of steel buildings will likely increase these next few years, prefab metal and steel buildings will continue to be a much more economical and longer-lasting choice than traditional buildings even with global steel prices rising.