The Steel Situation

Following the inactivity of steel production during the heights of the pandemic, steel cannot get online quickly enough to meet recovering steel demand and restocking. All of which is leading to a rapid rise in prices. So, what does the rising cost of steel mean to our customers? Firstly, there’s no surprise that the rising cost of steel is impacting the price of pallet racking, shelving, mezzanines, conveyors, and the majority of items we sell and install. The second impact factor is the availability of steel. As larger steel brokers buy up reserves, it’s forcing smaller manufacturers to pay more or wait longer for the supply to become available. In the short-term, this means that your project may cost more and this all comes down to steel fluctuations. Of course, we don’t want this for our customers. However, the other bigger impact that we’re seeing is lead time. As many companies across the country are placing orders to lock in costs, the lead time from the manufacturers is getting stretched more and more. These manufacturers are getting flooded with orders maximising their capacity. In turn, lead times that may have been around six weeks now are close to twelve. Although the pandemic is easing, the steel industry remains subject to various risks that could affect demand, prices and margins, including those related to the pandemic, such as a wider virus spread of the Indian Variant, the slowing down of vaccinations or any further lockdowns. The inevitable result in this climate is that customers need to make decisions quickly if they want to minimise the impact of rising steel costs, freight implications and longer lead times jeopardising the project carrying beyond the deadline goals. The best way to get ahead of the inevitable increases in steel prices is to book your projects sooner rather than later, giving you peace of mind that your projects will be completed on time and on budget. It is impossible to predict the long-term effects of steel prices. That’s why we suggest putting the wheels in motion to any storage projects you’ve wanted to get done now. IKON can help you navigate these variables affecting your project to assist you in making better project planning decisions.

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