Hello,
I hope you’re having a great week. Just wanted to update and share an article that someone sent me this morning.
It’s a bit old (published July 2021), however the issues it brought up then are still true today. It is focused on the steel industry and the cost of raw steel being up over 200% at that time.
I know I have seen and heard it from many of my clients that the cost of all metals are higher than they have seen in a long time or ever. What we thought was probably going to be a bubble looks to be a continuing trend for the foreseeable future. As we head into the final months of this year we see the issues that caused everyone trouble in January still causing the same issues in September. Labor shortages, trucking issues, port congestion, etc. We are all dealing with these issues and it feels like there is almost no end in sight for them to be fixed or relieved.
On the scrap side, we have seen pricing on metals indexes skyrocket to then correct themselves. These pricing waves can be hard to adjust to as it causes instability and fear in the market. It feels like we do not know if we are purchasing or selling at the right time. As my father taught me when I started in this business a good price today is better than hoping for a higher price tomorrow. This philosophy has allowed us to keep cash flow positive and our inventory low.
Hopefully this article and index are helpful for you.
As always if you have any questions please don’t hesitate to reach out.
Have a great rest of your week.
https://fortune.com/2021/07/08/steel-prices-2021-going-up-bubble/
