The price of doing business

As supply chain uncertainties abound, fabricators keep their eyes on the price of steel


Keeping up with the price of carbon steel in 2022 has been a roller coaster ride. One day, the news articles focus on the “likely reduction in steel prices” and how it will positively impact automakers. The next day, news outlets are looking into how Russia’s plan to reduce gas supplies to the European Union will raise steel prices.

The situation in Europe, particularly with the war in Ukraine, has definitely had an impact on the ride manufacturers are taking in 2022. In a video focused on steel pricing, Nick Webb, director of risk management at Ryerson, a leading metals distributor and processor headquartered in Chicago, said given Europe’s proximity to Russia and Ukraine, the onset of the war brought on “fairly large panic within the European region for steel products, whether it was scrap, iron ore, coking coal – it really led the U.S. rally. A couple weeks later, the U.S. market, which was trading down $1,000 a ton on the hot roll contract traded up about $500 to $600 very quickly.”


Webb pointed out that it’s been an interesting last three or four months, as we’ve “seen a roller coaster of prices coming down sharply, going up sharply and going back down. Unfortunately, this volatility we’ve seen in metals and more broadly commodities, seems like it’s going to be with us for a little while as we sort through the supply/demand balances.”

Webb said a “little bit” of that panic has subsided, partially because Europe has found other sources of material, including from China. He also said we’re looking to see a reduction in the cost of scrap by about $50 to $75, which “should make it easier for steel mills to produce steel profitably at slightly lower prices. Steel markets across flat and long products are still extremely tight.”

But now that China is again seeing a surge in Covid-19 and is in lockdown, uncertainty is again part of the situation. China’s lockdown has resulted in a “2.9 percent industrial output drop year on year for April,” according to a recent article in MetalMiner.

There’s also the futures game to consider in more accurately projecting the cost of steel in the coming months. For example, in the last month, Webb mentioned that steel futures dropped by about $300 on various parts of the futures curve.

“We are beginning to see some customers step back into the market and do some hedging so they can lock up their prices,” he continued, “but we do have the ability to lock in futures prices so we can give our customers fixed prices on steel.”


Steel prices hit historic highs in 2021, and Elizabeth Efta, director of logistics at Ryerson, said in a recent report on the company website that the port and freight challenges that are largely to blame for what happened with prices in 2021 “haven’t quite left the party” in 2022.

“The flatbed market continues to be stagnant with spot rates basically flat for the last quarter,” she said in the report. “So, the uptick in tightening flatbed capacity (load to truck ratio) at the end of the year is expected to remain through the first quarter.”


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