Final Thoughts

With hot rolled steel fast approaching $1,000 a ton, it’s only a matter of time before prices begin to cut into demand. Some SMU sources already report early signs of a demand shift. Others are less concerned about the volume of orders than about where they will get the steel to fill them if supplies remain so tight.

“Auto is going full bore. Other industries are slowing due to the price,” said one exec. “I heard that mechanical contractors in California are beginning to postpone projects because of the high steel costs. They would rather furlough their employees until the ‘madness’ calms down, than pay so much more for materials than originally projected,” reported another observer. “Some mills are sold out for the first quarter and others are writing ‘sales plans’ for February shipments. We raised pricing to cover our replacement cost and customers went quiet,” said a third.