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Steel – The Commodity that Fuels Economies

Steel, unlike other commodities, is found in every corner of the world. Nearly every market sector depends on steel—housing, transportation, utilities, and more.

Without steel we wouldn't have vehicles, energy plants, grocery stores, or desks. Steel is the unsung hero running our markets, economies, and households.

The Steel Commodity Market

Steel doesn't trade on a standard exchange like other commodities. The price of steel is regulated based on real-time supply and demand—not futures markets speculators. As a result of trade imbalances, the price of steel fluctuates to accommodate price discrepancies—also known as arbitrage.

Steel Imports and Exports

Steel imports and exports, as explained above, vary based on price inconsistencies between countries and, many times, between entire continents. The steel market relies on cyclical economic cycles. As one country experiences a housing boom, another country slumps. Eastern Asian countries, namely China, have undergone massive economic transformations. These transformations require huge amounts of steel—steel which must be imported.

As demand increases in one region, supply increases in another. Countries once labeled as expanding head into recessions which lowers the demand for steel. These countries, in turn, have more opportunities for exporting their own steel. As demand slowly increases in one location, it slowly decreases in another.

Steel's Future

Although steel remains without a formal exchange, speculation continues to build as to the metal's future in the commodity markets. Enormous economic expansion, especially in developing countries, has fueled unprecedented demand for steel.

Steel is the heartbeat of every nation. From construction to transportation, we wouldn't be where we are today without it. And, although supply and demand can fluctuate wildly, the financial world has chosen to sideline the commodity for now. Steel's future, while uncertain in the markets, is guaranteed in the world economies.