Steel Prices Spike

An unusually steep jump in steel prices over the past nine months is putting pressure on the manufacturing and construction industries. According to MSNBC news, the rising steel costs also are bumping up the cost of construction for roads and buildings by 10 to 20 percent compared to a year ago. As of August, the Midwest average price of hot-rolled sheets of steel increased from $270 per ton to $709 per ton, according to a survey from Purchasingdata.com.

Industry sources say prices are up because of high demand in China and because there's less steel being made in the United States due to closures of steel mills in recent years.

The spike has hurt contractors who agreed to their fees for their services this year before the steel prices shot up. To adjust to the rising prices, some contractors have started adding surcharges to break out the cost of steel. Other contractors are buying all the steel they need for a project, then storing it on job sites as a way of getting control, said Scott Weicht, executive vice president of Adolfson & Peterson Inc., a Minneapolis construction firm.

For now, Weicht anticipates the price of steel and other building materials will increase because of continued demand from China and a spike in demand in the United States due to hurricane damage.

Source: msnbc.msn.com