There is no doubt that Covid-19 has had big impacts on both the supply chain and steel markets, but there are other factors that are rarely considered, that have had an even bigger impact on steel pricing.
Covid-19 direct impacts include the higher cost of employment, finding a good workforce, added costs for virus protection and cleaning, as well as the added cost of sick time when people are recovering from the virus.
However, the biggest impact has come from the unexpected factors. When Covid-19 hit, many steel mills closed melt and furnace capacity and over time, decided to not bring that tonnage back into the market. That tonnage is calculated to be between 14,000-17,000 daily tons. The obvious result is a tighter supply of steel products which naturally increases the price.
Being a worldwide pandemic, the supply chains for US imports have been disrupted. Traditionally the imports were for predominantly manufactured products; everything from lightbulbs to computers and electronics to toys. With a reduced supply of these products in the US market and an increase of demand for them from changing lifestyles that resulted from Covid-19, US manufacturers shifted production and the supply chain to the US. This caused a stronger than normal demand at US mills for mostly flat steel products used in the manufacture of these high demand products.
Society has also changed. With more people working at home, the demand for home goods containing steel has increased. People want new computers, appliances, HVACs, cars and other steel containing goods. The federal government also gave consumers more . This also led to an increased demand for steel containing products that now have US steel in them.
The normal steel consuming items have remained strong and now we have added demand for US manufactured products and products formally produced in other countries.
Everything that Covid-19 has touched has led to an increase in the demand for steel products. Capacity rates are high and production is low. This will always lead to a supply driven market with higher prices.