With the pandemic leading to many changes within the concrete construction industry—and in fact, the industry as a whole—there has been a lot of chaos in markets lately. But how have things changed as opposed to last quarter? We’ll examine the state of the concrete construction industry as it stands right now.
What’s Happening with Scrap?
Last quarter, scrap prices dipped, mills reported being oversold, and demand was high for raw materials. Things have changed somewhat since then—though overall, this is one market that isn’t particularly volatile right now. Scrap has overall seen growth for the past three months, and many are reporting that the market is slightly imbalanced with just a little bit too much scrap supply.
All of this means that it’s highly unlikely the scrap markets are headed for either a boom or a bust. In all probability, we’ll see a slight dip in prices, and mills are likely to capitalize on these prices in order to meet rising demand—though there will continue to be long lead times on steel and rebar production owing to various other supply chain problems.
Shipping is Still Problematic
Last quarter, reports underscored the fact that shipping costs were soaring, and shipping times were often delayed—sometimes by months at a time. This quarter? Shipping still seems to be an issue. According to the US Census Bureau’s Small Business Pulse Survey, 59.7% of respondents reported dealing with domestic supplier delays while 19.1% reported dealing with foreign supplier delays.
These delays are still being caused by things like shutdowns and labor shortages, which have had a ripple effect across the entire supply chain. How long will these delays continue? Likely for quite some time, but it’s hard to say—and part of the reason for that is because more and more contractors are looking for alternatives to get around this problem, be it different suppliers who can provide the material on time, or different materials with more ready availability.
Lumber Prices Plunging
Last quarter, we reported that lumber prices had reached record highs as of March 2021–and that was only the beginning. In March, Lumber futures were between $750 and $800–before soaring to a peak of over $1,500 in May.
Will the Pandemic’s Fourth Wave Bring Closures?
As the Delta variant of COVID-19 surges, there is the fear that new shutdowns are coming, both for contractors and among suppliers—which would undoubtedly result in yet more supply chain and pricing chaos. So far, however, shutdowns don’t seem to be coming.
Steel and Rebar Imports Bring Good News
Perhaps the biggest bright spot in all of this is within the steel and rebar sector. Imported rebar jumped 12% from May to June, helping close shortage gaps. This follows the overall trend in rising U.S. steel imports, which have jumped 15%, according to July 27 reports from the Commerce Department. In June, the U.S. imported 2.63 million metric tons of steel, with Canada being the largest exporter of steel to the U.S.
These days, everywhere you look, there are ups and downs—but it does appear that while there are still troubles in some areas, things are overall on an upward swing for the concrete construction industry. The short term will continue to present difficulties with regards to shipping and supply availability, but lumber prices are falling, and steel imports are rising to help alleviate these challenges.