Raw material used in construction is seeing dramatic price increases and steel is no exception. As noted in this article from For Construction Pro’s, structural steel is up over 90% since Q4, 2020. Since our fall protection guard rail systems are construction from cast steel, pipe and tubing, these increases are having a significant impact on guard rail pricing.
So what is driving the increased pricing? The article details four contributing factors:
- Steel Fabrication Costs: fabrication costs are largely driven by wages and energy both of which are rising substantially post-COVID along with supply chain issues.
- Transportation: Each mile the material is moved is driven up by increased transportation costs, again includes wages as well as energy, insurance, maintenance, and taxes. Ocean freight costs have also spiked recently.
- Taxes and Duties: The US currently is carrying a 25% tariff on steel imports from many nations.
- Supply and Demand: As industries start to ramp up after an almost complete shutdown, there is a very high demand for basic commodities such steel and lumber; although, lately lumber is tapering off, which may be a leading indicator that the market is adjusting.
The issues that drove up lumber prices in late 2020 and into summer 2021 have similar COVID related undertones. As noted in Thomas Insights in May 2021, the core 3 reasons for lumber prices rising are:
- COVID related supply chain disruptions and unpredictability
- Spike in building material demand
- Growth lumber use for home improvement and DIY projects during quarantine.
Both articles indicated that it may be well into 2022 if not towards the end of 2022 before demand settles down and supplies get caught up. Since it may be a while before this equilibrium is reached, if you have a fall protection guard rail project on your to do list, then sooner will be cheaper than later.
Obviously, we will keep a close watch on the status of the material prices and keep you posted of any relevant updates.
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