Steelmakers are straining to keep up with resurgent orders from U.S. manufacturers, just months after preparing for a long, pandemic-driven slump in steel demand.
Steelmakers idled about one-third of domestic production capacity for flat-rolled steel this spring when their customers canceled orders and closed plants to slow the spread of the new coronavirus. Since many factories reopened a month or two later, steel demand for cars, appliances and machinery has rebounded, thanks in part to rising purchases from homebound consumers.
The benchmark price for hot-rolled sheet steel has doubled since early August to a two-year high of $900 a ton, according to S&P Global Platts. Steel distributors said soaring prices and the reduced availability of steel have touched off panic-buying by some manufacturers.
“There are people buying more than they need,” said Bill Hickey, chairman of distributor Lapham-Hickey Steel Corp., near Chicago.
The snapback surprised executives in a steel industry that had been in a slump for more than a year before the pandemic. “It caught everybody off guard,” said Todd Leebow, chief executive of Majestic Steel USA, a Cleveland-based distributor.
