State of steel 2022: Supply remains stable as prices rise

High steel costs have challenged propane tank manufacturers. (Photo courtesy of Quality Steel Corp.)

Several manufacturers of propane tanks and cylinders provided updates in the fall to circumstances surrounding steel supplies and pricing.

Having forecasted its needs and increased inventory levels, Metsa says it has a stable supply of steel for its manufacturing processes.

“One of the advantages is that our supplier is located [in] our city, so we have constant communication and there are no added challenges for supply such as maritime shipping,” says Daniel Quiroga, sales manager at Metsa, a manufacturer based in Mexico.

“As for pricing,” he says, “steel has quadrupled in less than a year, but looks to have peaked in September. We are not in the business of speculation, but we believe that we will see a plateau and gradual reduction to a new baseline that will most likely be far above $1,000 [a short ton].”

Similarly, procuring the steel has not been an issue at Worthington Industries, which benefits from a steel processing sister company.

“The biggest challenge has been the increase on the cost of steel. It’s up over 300 percent since August of 2020,” says Mark Komlosi, sales director at Worthington, in October. “So that leads into increased costs, price increases, not only on steel but by and large every item that’s used to make a tank. It’s definitely increased the cost of a cylinder to the LP gas marketers.”

The steel market factors have “forced the situation” in the propane industry, Quiroga says.

“We are all in this together,” he adds in his message for propane marketers. “Prices are affecting everyone, but we are in an industry that is fundamental for homes and business. Don’t panic with prices. I suggest getting a trustworthy supplier who can provide you with fair prices, supply planning to take care of your business, and to provide honest information.”

Quality Steel has seen the steel pricing trend develop over the past several years and climb toward historical highs. After the events of 2021, it’s hard to say what 2022 will hold.

“Demand for horizontal tanks and cylinders is above average and lead times continue to extend out,” says DD Hardy, national sales manager for Quality Steel parent LT Corp. “With so much uncertainty in the steel market and the allocation of available steel being limited, there’s no way to accurately predict how things will look in 2022.”