The country is working to make its way out of another economic slump after the 2020 pandemic closed companies across America. Many small businesses shut their doors for good, as other businesses made just enough sales to get-by. As 2021 begins, vaccinations are being distributed, and restrictions are lightening up; steps to an economic recovery are in action. However, the comeback doesn’t happen without struggles of its own.
A sharp increase in the prices of raw materials, including steel, has followed. Hot Rolled Steel, for example, has reached an increase of more than 100% in the six months between August 2020 and February 2021.
Why the Increase?
Early in the COVID-19 pandemic, shutdowns drove a significant decline in demand for raw materials causing many mills to slow down or stop production altogether. As the economy begins to recover again, demand increases, and the little raw materials available become important commodities. As supply and demand goes, a sharp increase in cost was associated.
Other factors have only contributed to the problem. Many companies, especially offshore, are experiencing delayed shipping, decreased labor, and various supply chain issues. Several factors will need to be adjusted in order for the mills to start producing full quantities again and support the prominent need for more material.
What’s to Come?
Steel pricing is expected to stay high through the second quarter of 2021, and the ultimate impacts of COVID-19 are still too far out to tell. With a goal of continuing on-time delivery and supporting our customers’ every need, OMT-Veyhl is working tirelessly with all our steel suppliers to stay ahead of the shortages.
For more information about OMT-Veyhl’s response to the pandemic and supply chain problems, contact our team at https://omt-veyhl.com/contact/.