March 11, 2020, the day everyone’s life was altered. Covid-19 was declared a global pandemic and life instantly changed: remote learning & working, zoom parties, contactless shopping and binge TV viewing.
2020 was also a year of loss: loss of life, loss of income, loss of milestone celebrations, loss of normalcy.
It was also a year American’s worked together. In less than a year, more than 25% of American adults have received at least one dose of a Covid-19 vaccine. With hope on the horizon, life will soon return to normal . . . or a “new normal”.
The prospect of new hope brings three new challenges to the stamping industry: raw material availability, sky-rocking prices and long lead times.
STEEL IS IN SHORT SUPPLY.
While the world was on hold, steel mill furnaces cooled, and production levels fell. With the renewed hope, demand has increased, and steel mills are trying to catch up. Mills are focusing their efforts on commonly used gauges. Uncommon items or specialty items are limited or not available.
In July, steel mills will be performing scheduled furnace maintenance which will further limit production. An increase in steel availability in not forecasted through the second and maybe the third quarter of 2021.
STEEL PRICING AT AN ALL-TIME HIGH.
Basic economic supply and demand principals are in play. Since the 4th quarter of 2020, prices have increased 40%, 60%, 80%, 100% and in some instances tripled.
Steel prices will find an equilibrium once the market settles down. Will they fall back to pre-Covid prices is anyone’s guess.
DELIVERY LEAD TIMES INCREASED EXPONENTIALLY.
Prior to the world changing, raw material delivery was 4 to 5 days from placing an order. Current steel delivery lead times are quoted at 4 to 8 weeks and longer. Truck availability, shipping container shortages have added to the transportation problem.
Reliable Metal Stamping Co., Inc. has faced countless obstacles over the last 76 years. The key to overcoming any obstacle is working together. Take comfort in knowing Reliable Metal Stamping Co., Inc. will be with you every step of the way as we navigate our “new normal“.