Rising Cost of Steel Affects Linn Post
As most farmers and ranchers are aware, there’s been a major shortage of steel over the past two years. This has led to a significant rise in the cost of steel. In effect, there’s been a cost increase for any items made from steel including refrigerators, cars, and of course, pipes. Linn Post and Pipe has felt the effects and unfortunately, so have our customers. So to start, we want to thank our loyal customers for sticking by us as the cost of steel fluctuates. We’re committed to keeping costs to our customers as reasonable as we can make them. For as long as we can.
Why is the Cost of Steel so High?
According to Fortune, the shutdowns in 2020 are to blame for the current steel shortage and rising cost of steel. Most steel mills shut down production with the rest of the country. They had no way of predicting that consumers would drastically change their spending habits. As Americans turned their attention to home renovations and upgrades, steel-heavy products were quickly in demand again. But the steel industry was caught off guard and supply fell way below the demand. Today, people are backing off on new appliances and DIY projects, but the industry is still playing catch up. The return in air travel and commuting to work have simply pulled the need of steel in a different direction.
Changes in Steel Products at Linn Post
Over the last year, the effects of the rising cost of steel has trickled down to Linn Post and Pipe. Most of the products we purchase have increased 50-60%. But some products have increased by more than 100%. For the Linn Post and Pipe customer, this means an increase in prices of certain products of up to 20%.
Not only has pricing changed because of the rising cost of steel, but so has the availability of certain products. According to Kyle Peters, General Manager and Company President of Linn Post and Pipe, “We have had to expand our buying options to as far as three states away, just to get steel here.” Linn Post and Pipe has even had to stop selling two of our oil field products. The cost of getting the steel was more than the finished product could be sold for. This and the increase in price on new oil-field pipe has driven demand higher for used oil-field pipe and rod. In turn, this has made availability for affordable oil-field pipe nearly impossible.