According to the Boston Globe, the developers of a new luxury condominium in Providence, R.I., scrapped plans for a steel structure and drew up a new design in concrete. Other parts of the country favor concrete, which is more expensive, but in the East almost all modern towers and tall residential buildings are built on skeletons of steel columns and beams. This building is to be Rhode Island's tallest building, and the new concrete design was able to squeeze two more floors into the building without increasing the building's height or taking away from the initial design.

With construction costs skyrocketing, due largely to the rising price of steel, the developers, Blue Chip Properties, decided to price a concrete structure. “The steel price rises day to day,” said Minhaj Kirmani, a principal of Weidlinger Associates Inc. of Cambridge, consulting engineers to Blue Chip Properties. “Nobody can guarantee prices six months down the line.”

Even with increasing steel prices, switching to concrete was more expensive foot for foot than steel. “But the delta [price difference] got small enough that we thought the advantages were strong enough to do it,” said Jeremiah O'Connor III, project manager for Blue Chip.

Construction prices have risen about 20% since the beginning of 2004, and the cost of steel—driven up by fierce demand for steel from China and the other emerging economies of Asia—is one of the major reasons. The price of steel is based largely on the cost of scrap metal, which gets recycled into the beams that form modern buildings. That price has gone up about 70% since late 2003, meaning a typical ton of finished steel that cost $380 two-and-a-half years ago now costs $660.

Even a concrete building requires some structural steel (rebar) to give it strength. But that amounts to only about half of the steel that is used in a steel frame. Rebar is cheaper than steel used in structural beams, and doesn't have to be fabricated into precise shapes and sizes, which with energy prices also rising, is increasingly expensive.