U.S. steel prices have been in decline due to a number of factors. While this poses some risk to U.S. steel companies, it can also benefit consumers and businesses who want to build with steel and take advantage of low commodity prices. The 25% tariff increase to steel in 2019 provided a much-needed shot in the arm for steel companies and brought them back to life, but sales began to level off at the end of the year. Here are the reasons the price of steel remains low and what businesses can do to take advantage of steel building contractors youngstown oh.
China has seen a slump in its demand for steel due to the novel coronavirus, which nearly halted its position as the largest consumer of steel in the world. The global pandemic, which began in the Hubei province of Wuhan, triggered a sell-ff os U.S. steel stocks. The immediate impact has been double-digit share price losses seen across the steel industry in the U.S.
As the commodity market takes a hit from the coronavirus pandemic and the global economy braces for potential impact, businesses would be well-served to determine how they can leverage the information to position themselves appropriately. Many companies in the U.S. understand the need to have multiple suppliers to maintain business continuity in the event of things such as this pandemic. If the commodity itself has a high supply and the cost is low, it would make sense to benefit from the low cost and start steel building projects now, which will inject more money into the economy and help to reduce inventory.
An End in Sight
The current estimate is for U.S. coronavirus cases to peak April 13th followed by two weeks of a decline of cases. There will be an end to the “shelter-in-place” orders and the resulting lack of productivity. The economy will take off again and businesses should prepare. Businesses should leverage the time to make wise decisions to position themselves nicely for when the time comes.