As we head into 2022, we want to take a look at what the metals market will look like during the first quarter. The first quarter, which runs from January 1, 2022 to March 31, 2022, is a three month period that those in the fabrication and machining spaces use to keep records on things like finances, seasonal trends, and other important information like the supply chain.
So what do the reports for Quarter 1 look like for 2022 in the metals market and fabrication spaces?
Global Recovery To Be Expected To A Degree
No industry has been left untouched by the COVID-19 pandemic over the last two years, from areas like shipping to our very own custom metal machining manufacturers. But a recent report from J.P. Morgan has some positive news for the metals market as we head further into Quarter 1.
Though there was a November 2021 setback in the commodities space and J.P. Morgan did make note that supply across industries did struggle to “keep pace with resurgent demand”, industrial metals are set to have a relatively strong year in 2022.
Industrial metals might take a bit of time to find their balance this year, but prices are expected to be kept supportive for the first half of the year. Compared to the 160% price jump manufacturers and fabricators were seeing in Quarter 1 last year, we can now look forward to some more steady pricing – which in turn means steady pricing that extends to our vendors and customers as well.
Steel Will See Growing Demand
With a narrower lens, let’s take a look at steel – a material that plays an important role in spaces like construction, automotive parts, and the steel extrusion process.
Steel has seen a growing demand over the last two years, and that doesn’t look like it will change anytime soon. The World Steel Association (WSA) reports that it expects to see a 2.2% growth in steel demand in 2022.
And while steel did hit a high price during the pandemic, at one point even being 300% above it’s pre-pandemic price, steel is expected see a year of “normalization and downward pressure as more supply and shorter lead times improve availability for buyers”, according to industry analysts that spoke to S&P Global.
One analyst, Andreas Bokkenheuser, noted that the US steel market is now in a surplus as opposed to being in a deficit over the last year and a half and “that surplus most likely grows larger next year.”
With an outlook of normalization from industry experts, we can hopefully expect to see something closer to average upticks in steel costs during Quarter 1.
Fab-Tec Is Here For Your First Quarter Fabrication Needs
With the metals market looking to be on its way to some steady pricing, David Bolding Jr. of Fab-Tec has some insight into our own standing here at Fqb-Tec as we move into Quarter 1!
“Like most fabrication companies, we have seen a steady growth in 2021 and we expect the same in 2022. The supply chain continues to bring delays on most of our materials, however we will continue to adapt and overcome. We are starting off 2022 with many large projects on the schedule and many new customers on the hook.”
“As long as we maintain our OTD (on time delivery) and our raw material inventory, I feel that Fab-Tec will be overwhelmed with new opportunities in the first quarter and throughout 2022. We are full steam ahead and we do not plan on slowing down any time soon.”
As we all look forward to a productive first quarter, keep Fab-Tec in mind for any and all of your metal fabrication and powder coating needs. You can connect with us online to request a quote today!
