RV manufacturers have felt the sting in recent weeks of higher commodity prices, but the cost of one key commodity, steel, may have peaked, according to an article in today’s (April 15) Wall Street Journal.
One analyst told the Journal, “Steel prices have definitely peaked,” but added that it was too early to know whether they will come down significantly.
According to RV industry sources, prices for hot-rolled steel had increased 59% and for cold-rolled steel 34% earlier this year.
Steel is among a long list of building materials that increased in price rather dramatically earlier this year. As a result, certain RV builders have announced price increases. However, because the cost of basic materials makes up a relatively small portion of the total cost of assembling an RV, the announced price increases by RV builders have been in the 3% range.
Steel prices may have peaked because minimill operators, which make steel from scrap, either have or plan to eliminate surcharges that were added on to the prices that were stated in long-term contracts with their customers. The minimill operators imposed the surcharges because the price for scarp steel reached a near record high earlier this year, but those prices have started to decline.
However, the price of steel produced by the operators of integrated steel mills, which make steel from iron ore and other natural resource materials, may head in the opposite direction.
One integrated mill operator, AK Steel Holding Corp. of Middletown, Ohio, plans to increase its spot market prices on May 1, the Journal reports.