In the few weeks, steel prices have been on the rise.
The Wall Street Journal is reporting a few events that helped trigger a rise in prices about 10 percent to its highest levels since early January. The Journal says a blast furnace outage in Ohio and Brazil, plus a work stoppage in Ontario “have taken an estimated five million tons of annual capacity, or 4 percent of total U.S. supply, off the market over the last three months.”
This week the price of hot-rolled steel coil was up to $630 from a low of $570 in late May, the Journal said. The market had about 200 million tons of excess because the economy in Europe has been so feeble.
Prices will be expected to go down in the fourth quarter when blast furnaces in Brazil and Ohio are fixed, and when U.S. Steel’s mill in Lake Erie, Ontario reach an agreement with their employees. Currently, the Ontario plant has 1,000 employees in the third month of a lockout at a plant that makes over 2 million tons of steel annually.
It makes sense that steel rises during the summer because of more steel driven construction, which means less steel is in the market. But combine that with a few major plants out of commission for a little bit, and you get a demand for steel that exceeds the supply.
Last year, the price of steel was around $600 a ton.