chains into chaos, and steel — an essential metal used in everything from dishwashers to cars — was not immune to these disruptions.
“Steel is certainly one of those examples of shortages, higher prices, and growing frustration among customers,” Associated Builders and Contractors chief economist Anirban Basu told CNBC.
Demand for steel dropped at the beginning of the coronavirus pandemic, but then it quickly skyrocketed. At one point, steel prices were 300% above their pre-pandemic levels at more than $1,900 per ton. Before the pandemic, steel priced between $500 per ton and and $800 per ton.
Steel’s high price tag hasn’t really dropped all that much, and some worry it’s a bubble that’s about to burst.
“They have turned into a bubble. So, they go higher because they go higher,” CRU Group analyst Josh Spoores about steel prices.
Steel is a key material in infrastructure projects, making the Biden administration’s plan to inject billions into U.S. infrastructure a huge boon to manufacturers.
“We estimate that for every $100 billion of new investment in infrastructure, that’s going to mean 5 million tons of additional steel demand,” American Iron and Steel Institute CEO Kevin Dempsey said.
Globally, steel demand in 2021 is expected to increase by 3.8% over 2020, according to the World Steel Association.