Steel Market Update: Q3 2021 Outlook

Boyd Metals

In April, we outlined several market dynamics impacting availability and pricing for steel products. Little has changed in the intervening months. The steel industry continues to experience extreme demand, challenging supply issues, and historically high pricing. This tight squeeze on material, combined with record pricing, leads to significant challenges in the distribution pipeline. The ongoing uncertainties hinder large “speculative” inventory buys – even if “extra” material was available. 

The mills are bustling and remain bullish; as a group, industry experts don’t see the market cooling down in the short term.  The cost of steel from domestic mills has reached levels inconceivable just a few months back. One big concern: is pricing approaching a level that will force fabricators or end-users to start canceling projects? 

Inventories at service centers are still at historically low levels (under two months’ requirements, per data from the Metals Service Center Institute). Shipping capacity from mill to warehouse continues to be a wild card with a scarcity of trucks (and drivers) available.

At Boyd Metals, we are looking at the market one quarter at a time and doing our best to interpret the tea leaves. There is a plurality of opinion from a plethora of experts about the balance of product on year's end, but no one really knows when (or if) the situation will begin to normalize. We anticipate and are preparing for a strong third quarter, but that is about as far ahead as we are comfortable forecasting. Meanwhile, we will do everything in our power to keep basic inventory on our floor, ready and available for same-or-next-day deliveries.  

The Boyd Metals Sales and Purchasing teams are working closely to ensure our ability to take care of customer requirements in a difficult market. Our practice has always been to quote everything possible on a customer’s buy list, even if some items are non-standard. This certainly adds to the workload, but we are happy to provide the additional service. We strive every day to be your go-to source and earn your confidence and continuing patronage.

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Tags: Metal Industry and Product Knowledge