Steel prices starting to settle

The sudden spike in steel prices that disrupted many construction projects and threatened some businesses with bankruptcy appears to be abating at last, the chief economist for the Association General Contractors of America told the Kansas City Star last week.

Ken Simonson noted that the soaring steel prices led to a March filing for bankruptcy protection by Kansas City's Havens Steel Co. "It looked like the first of a long string of businesses having to file bankruptcy or shut down," Simonson said at a local AGC function in Kansas City.

But the crisis appears to have peaked. After rising through March, steel prices dropped in April and May. Scrap steel supply, however, rose again as people becoming aware of the issue began taking advantage of high scrap prices to unload unwanted items at home.

Prices are still 50% higher than the year before, but at least the trend is in the right direction, said Simonson. "We'll still see small increases in some types of steel, but the situation is not as dire as it was on price or availability."

Simonson believes general contractors may experience spot shortages and price spikes for raw materials, notably cement in some regions of the country.