AISC Responds to ENR Inaccuracies on Steel Pricing
July 06, 2006 From American Institute of Steel Construction, Inc.
The June 26th issue of ENR (Engineering News Record) carries the following headline on the cover: “Costs Climb: Steel prices are rising again along with copper and oil-based products” and contains 2 articles that inaccurately picture the current state of steel supply.
The following email is the response sent to the editors of ENR highlighting several of the inaccuracies in their reports.
We’re confused by a couple of things in your June 26, 2006 issue and we’re hoping you can explain them.
First, your cover story reports: “Costs Climb: Steel prices are rising again along with copper and oil-based products.” And the message is repeated on page 66: “Inflation Maintains Strong Momentum: Steel prices start to pick back up after brief pause in 2005.” Yet when I look at the data, the story seems different (see the Construction Materials Price Movement chart on page 67). According to the data you present, fabricated steel for buildings increased 0.3% in May (up 4.3% from one year earlier) while aluminum sheet was up 3.6% in May (15.0% from one year earlier), cement was up 0.3% in May (up 14.9% from one year earlier), gypsum products were up 4.7% in May (25.9% from a year earlier), lumber was up 2.7% in May (up 3.4% from a year earlier), and ready-mix concrete was up 0.5% in May (up 13% from a year earlier). Looking at that data, it seems the story should have been that steel is keeping pace with inflation while other building materials are causing construction prices to surge. Did you accidentally pick up an old headline or did we miss something?
Also, you report that warehouse stock of steel is low and is filling up at today’s higher prices—in reality, warehouse stock is high. In fact, Michelle Applebaum Research Inc. reports that structural steel inventories were up 1.5% in April and have increased for eight consecutive months.
To top it off, you’re not even consistent throughout the issue. On page 20, your headline reads: “Steel Prices Holding at Higher Levels.” Are we the only ones confused?
To add insult to injury, you have a story on page 68 headlined: “Contractors are Scrambling in a Busy Market with Fabrication Bottlenecks.” However, the entire story deals with the heavy industrial and power markets—a point emphasized by the discussion of the logistics involved in shipping fabricated steel overseas and the chart that shows delivery time for alloy and stainless steel rather than the carbon steel used in most structural steel building projects. While most fabricators are busy (what contractors aren’t in this booming market?), there is not currently a shortage of fabricator capacity in most areas of the country.
We would appreciate hearing an explanation of these issues—and ideally seeing a clarification in your next issue.
For more information contact:
VP of Communications
American Institute of Steel Construction
The American Institute of Steel Construction, headquartered in Chicago, is a not-for-profit technical institute and trade association established in 1921 to serve the structural steel design community and construction industry. AISC’s mission is to make structural steel the material of choice by being the leader in structural steel-related technical and market-building activities, including: specification and code development, research, education, technical assistance, quality certification, standardization, and market development. AISC has a long tradition of service to the steel construction industry of providing timely and reliable information.
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