Back to News

July 17, 2014 - Steel prices have seen relative calm for several years now. This has been the result of a relatively balanced market – with demand in parts of the global economy being off-set by relative sluggishness in other areas. However, it is apparent to steel watchers in recent months that the equilibrium is shifting towards inflationary pressures on pricing.

There are three primary reasons for this.

1. The US recovery continues to heat up – The US, particularly on the West Coast, is in the midst of a mini-boom in construction, with activity rising very considerably from recessionary lows. The US construction market has been recovering painfully slowly for some time, but in the past 12 months that recovery has accelerated considerably. For the first time since the recession, construction levels have moved from adequate to strong on the West Coast. As such, the US has gone from a market desperate to export its steel to a more buoyant Western Canada, to a market that requires its West Coast production for domestic consumption.
2. Bearish predictions of the future of Asian economies have not come to pass – Steel pricing was moderated with the relative cooling of Asian economies, primarily China. This moderation was due in part to concerns over the extent of the cooling and whether Asia was set for a significant slowdown. However, it now seems apparent that economic activity will continue at a healthy pace, and Asia’s enormous steel consumption will continue for some time, albeit off of recent frenzied consumption levels.
3. Dumping Action – The steel market in Canada is also about to be impacted by a dumping action which has been brought by domestic steel mills. On June 13, 2014, the Canada Border Services Agency (CBSA) initiated investigations under the Special Import Measures Act respecting alleged injurious dumping and subsidizing of rebar originating in or exported from the People’s Republic of China, the Republic of Korea, and the Republic of Turkey. The investigations follow a complaint filed by Alta Steel Inc. (Edmonton, Alberta), ArcelorMittal LCNA (Contrecoeur, Quebec), and Gerdau Longsteel North America (Whitby, Ontario). Written reasons have not yet been published to clarify the reasons behind the investigations.

A dumping action and resulting import tariffs are likely to have an impact on steel pricing and supply in Western Canada. Because of transport costs from central Canada and the US, BC and Alberta have always relied heavily on steel imports. There is absolutely no domestic steel production in BC, and Alberta’s Alta Steel only produces rebar on a limited basis.

Therefore, the primary “domestic” sources of steel are two US mills – Nucor Steel in Seattle and Cascade Steel in Oregon. Given the busy US west coast construction industry, it is very likely that supply and demand forces will result in increased in pricing from these mills. As such, both offshore and domestic pricing is likely to be impacted by the dumping action to varying degrees.

We therefore see three forces putting upwards pressure on steel pricing in the coming months. BC and Alberta are generally in the same steel market, and we expect the pressures will be similar in the two provinces.

How much of a change in pricing should you expect? As always, it is nearly impossible to predict. We believe the pressure will be considerable, beyond what we have seen in recent years. However, all that we can truly say with confidence is that over the balance of 2014 it is far more likely that prices will rise than decline.

Authored by Norm Streu, as published in Construction Business Magazine (July/August 2014 edition).

Project Highlight:  Grain Silos – Slip Form Construction

North Vancouver, BC

Customer: FWS Group

LMS will have a crew of 120 installers working 24 hours a day for seven days on the construction of a new grain silo located in North Vancouver. The project requires a continuous pour of concrete to build the structure. The structure will rise by 1 inch every 6 minutes as rebar is placed and concrete is poured continuously until the structure is complete.

Project Highlight:  Kelly Ramsey – Largest Post-Tensioning project in Alberta in 20 Years

Edmonton, AB

Customer: Ledcor Construction

Construction is underway on the Kelly Ramsey project in Edmonton. LMS is responsible for the fabrication and installation of all the rebar and post-tensioning in this $250 million development.  The Kelly Ramsey project consists of the construction of four and a half levels of underground parking, a hotel and 29 storey office tower with the historic Kelly-Ramsey Building being reassembled as a podium. The original Kelly Ramsey building was built in 1915 and suffered extensive fire damage in 2009. Based on market demands for modern and flexible floor space, the owner proposes to:

• Remove the core of the building and majority of the north and west facades while keeping the original brick to reuse;
• Remove windows, but keep samples of each type of window to use as templates for replacement windows;
• Remove metal cornices to reuse where possible and/or use as templates for replacement cornices;
• Dismantle, rebuild and restore the east and south facades with a 20 foot return of the north and west elevations.

Occupancy is scheduled for early 2016.

Back to Community