Take the Metal Challenge

Have you noticed a drop in the price of lumber lately? Sitting at roughly $1,200 per 1,000 board foot, lumber looks attractively priced this month when compared to the highs it reached of around $1,700 in May. But before you go all in on wood for your next project, compare that with the year-ago price of $352!

Naturally this is all conjecture given the fact that wood isn’t an alternative for all uses of metal. But truth be told, you’d be forgiven for exploring alternative materials given that metal prices continue to break record high prices these days.

But with any alternative material you need to be asking yourself one question: Do I sacrifice the long-term sustainability and durability of steel for short-term price relief?

As addressed in a recent SteelNow blog, the strength and durability of metal presents vast competitive advantages over other materials. Back to the lumber comparison, metal isn’t as susceptible to harsh weather and environmental conditions. For instance, high degrees of heat can make wood expand, while extreme cold can lead to shrinkage—both of which could leave you with cracking or loose joints.

Now that we have you back in the metal mindset, your next question is probably this: When will steel prices begin to abate?

That comes back to the old scenario of supply and demand. And here’s the good news: Steel capacity utilization rates eclipsed 80% in May. This is the first time that rates have reached this threshold, which many believe is a benchmark for maintaining sufficient market supply, since before the COVID-19 pandemic.

Even better news is the fact that the southern part of the United States, which includes Texas, produced the largest tonnage of capacity for the week ending June 5. According to the American Iron and Steel Institute, domestic raw steel production for the week was 1.84 million net tons, 787,000 of which came from the South.

Ultimately, the hope is that by the end of 2021, your ability to get steel will get much better. And perhaps hold off on those alternative materials that don't provide the same long-term benefits to steel.