Steel price

[Sticky]

Has anybody noticed a sharp price increase in steel this past week? (Like 20 - 40%) Is my steel place squeezing me?

[Franz]

Probably just steel suppliers taking advantage of the end of tariffs a few weeks back.
Must be they took a lesson from the oil companys.

It's nation wide. Including here in the Sunshine state

[david_r]

Sticky,
Got a friend with a scrap yard. He's had a big smile on his face lately. Scrap steel prices are way up.

Yep. The Chinese are gobbling it all up.
Probably to replace all that HF stuff we've been buying

My Local supplier told me a few months ago that the prices were going up 30% on new steel. He was not going to raise the price on the cut-offs and rusted steel.

[Bolt]

Yup, big time jump in steel.

Right when we soon need a bunch of I - beam, roofing metal, and used drill stem.

On the bright side, now would be a good time for me to haul off all the scrap thats accumulated over the past year, pipe drops, worn cutting edges, that stuff. Perhaps I will make an extra 5 bucks on it compared to a month or 2 ago. LOL.

[Main]

Probably just steel suppliers taking advantage of the end of tariffs a few weeks back.

Franz,

Could you elaborate a little more. I would like to have a good explanation for my customers as to why I'm charging more for the same product that they purchased six months ago. You see, I manufacture a type of anchor for the commercial fishing industry. It's nothing more than a big weight (220#) to hold fishing gear on the bottom. It started out small for orders of ten here and ten there but now I'm getting orders for eighty or more at a time. If I start raising my prices the fisherman are going to accuse me of sleeping in the same bed as the fish buyers that screw them on a daily basis. One thing about commercial fisherman, they're fiercely independent and very skeptical but they also have a very healthy respect for honesty. Thanks.

[Franz]

A couple years back, the Steel Workers Union prevailed on Pres Bush to place a tariff on all imported steel to enable US steelmakers to catch up on technology and keep steel production in the US.
In the 2+ years since, a couple more steel mills have closed, and another one is currently in the process of being sold to Russian investors. Not a single steel mill used the time to modernize.
With elections coming up, the UAW and automakers prevailed on Bush to remove the tarrif about a month ago, since automakers are the largest consumer of steel in this country.
At the current time, steel inventorys are probably low, and production is minimal in this country. Everyone with wholesale steel inventory sees this as an opportunity to raise the price of steel, and is doing so.
Even Ford's River Rouge steel plant is for sale, probably cause US tax laws and union contracts don't foster production. Bethleham Steel no longer exists in the Lehigh Valley, and with the minimal production that still exists, steel will become a seller's market.

In situations like you have, I recommend posting an old invoice and current invoice where the customer can see it, so the customer knows where the blame lies. In ongoing customer relations, you might even want to offer a very limited duration opportunity to pre buy your product at the current price. Of course, the customer will prepay an amount that will cover your cost of material and storage.
Customers tend to not get quite as pissed off when they are warned of impending price increases. You can often turn an increase in production cost to your advantage by telling customers what is coming.

[Main]

Thanks Franz. Greatly appreciated

[Jerry]

Yeh Damn prices have almost doubled on some items. Steel rep told me China is buying scrap metal and with the shipping season closed for the great lakes area prices will be higher. I say BS, if all you guys are paying more across the states. I thought that with the tariff being lifted prices would go down.

price of oilfield tubing going up up up, their buyin all our stock faster than i can keep up with lately. We've already adjusted our prices up.

[boilerman]

thank god for the junk pile out back ...i'll weather this ok ooooppppsss had to come back for edit here ....i've been informed that it is a junque pile ...forgive me for my sin

Just got some quotes today. On 1-1/2" .120 DOM round tubing, was quoted $3.35/Ft. That's up a good $0.80 over 2 weeks ago.

On the other hand, the 1-3/4 .120 DOM round tubing is still at $2.05/ft. Same as it has been. I guess that's based on their current inventory. Sounds like I better hop now.

[Franz]

Bichin about steel prices started on the machinist boards about a week after the tariff was lifted.
There has also been some talk over on the blacksmith board about steel mills closing down in spite of the tariff. Between energy costs and environmental costs, there isn't going to be much steel even rolled in this country soon. It also looks like the steelworkers will get screwed out of their pensions.
The sad thing is how many people want to look at this situation short term, when the situation has been developing over the last 30 years.
Completion of the 3 gorges dam in China is going to kick heavy industry in the *** world wide. Even Mexico can't compete with cheap labor and cheap electricity.

[vipermanz]

steel production here has sharply increased in the last year, both coil and pipe manufacturing at uss's fairfield works where my dad works have seen jumps in production, and while tariffs were active, the pant has seen several modernizing updates take place, pretty much the whole plant is wired together with fiber optics lines, Maybe this is just regional but i will say that has been a vary good past 12 months for steel in alabama. Some of the steel made here has been exported to china oddely enough. most of whats made here is pipe for deep artic oil drilling and galvanized coils.

thanks

[dob]

even rebar prices are way up, company I do work for had a chance to buy 100 000 bars at 2.57 3 weeks ago. they decided not to because they still had 50 000 bars in the yard from last season- well they went to buy some yesterday and sure enough up to 4.57. two dollar increase in 3 weeks. OUCH.

[NoDak]

It was in the news this week, at least in North Dakota, that the largest , could have been the only, steel manufacturer in Canada is going under. They also have facilities in US. Forgot the name.

Can anyone from the Great White North confirm? Why would this be happening if steel prices are climbing?

Is it China or Japan that is buying scrap? Japan bought scrap from US prior to WWII in huge quantities. I don't trust either country!

[Crithpy_Critter]

Chi-Coms and Japs are buying scrap so they can smelt it and then sell it back to the US for below what we can make it for.

It's called free trade...you may have heard about it.

[Franz]

Subject: U.S. Management Philosophy

A Japanese company and an American company decided to have a canoe race on the Missouri River.

Both teams practiced long and hard to reach their peak performance before the race. On the big day the Japanese won by a mile. Afterward, the American team became very discouraged and morally depressed.

The American management decided the reason for the crushing defeat had to be found. A Management Team made up of senior management was formed to investigate and recommend appropriate action.

Their conclusion was the Japanese had 8 people rowing and 1 person steering, while the American team had 8 people steering and one person rowing. So American management hired a consulting company and paid them an incredible amount of money. They advised that too many people were steering the boat, while not enough people were rowing. To prevent losing to the Japanese again next year, the rowing team's management structure was totally reorganized to 4 steering supervisors, 3 area steering superintendents and 1 assistant superintendent steering manager.

They also implemented a new performance system that would give the 1 person rowing the boat greater incentive to work harder. It was called the Rowing Team Quality First Program, with meetings, dinners and free pens for the rower. Even new paddles and medical benefit incentives were promised for a winner. We must give the rower the empowerment and enrichments through this quality program.

The next year the Japanese won by two miles. Humiliated, the American management laid off the rower for poor performance, halted development of a new canoe, sold the paddles, and cancelled all capital investments for new equipment.

The money saved was distributed to the senior executives as bonuses.


__________________

That just about sums it up! Sad but true.

[NoDak]

I looked it up it's ALCAN that is talking about bankruptcy. Blaming it on employee pensions and health benefits keeping them from being competitive.

Want to read a little bit of history as it pertains to scrap metal?

www.ilwu19.com/history/1930.htm

[Franz]

Only in America...............

When NASA first started sending up astronauts, they quickly discovered that ball point pens would not work in zero gravity.
To combat this problem, NASA scientists spent a decade and $12 billion developing a pen that writes in zero gravity, upside down, on almost any surface including glass and at temperatures
ranging from below freezing to over 300 Degrees.
The Russians used a pencil.

Enjoy paying your taxes--they're due again soon.

[1911Man]

I just hope no one else has more good news to make me feel better! Despite its' warts the US of A is still the best place to be , at least on this rock.

[joehobart]

as an aside, the real story about those NASA pens. http://www.snopes.com/business/genius/spacepen.asp Its a great story, too bad its not exactly true. We actually only spent 1200$ for those super-pens.

Kind of interesting point about pensions driving the 'old' US companies out of buisiness. That whole pre-401k generation sucked the life out of hundreds of companies via pensions. Lots of interesting legislation on the hill about it for 04-05 session. Scary stuff if you've been counting on it your whole life, and theres just no money to pay it.

Has anyone seen any projections on when prices will stabilize again?