Steel Prices are Rising. How it Affects You
The price of steel used in structural buildings, framing, and warehouse storage systems can be hard to anticipate. Because steel is a global material used in many different products, the price changes based on activity around the world. Every day the price of steel per tonne changes, but price forecasters and economists alike are estimating a rise in price over the next few years.
What’s Happened So Far…
As you can see in the American Metal Market chart below, steel prices have already risen $12 per hundred pounds between March and June.
Manufacturing companies eliminate waste by incorporating Just-In-Time production methods. As a result, they must continually adjust prices dependent on the market of steel.
Managing the Impact
What does this mean for you and your customers?
- Now is the best time to purchase rack for the lowest possible price
- Delayed projects should probably move forward now to avoid increases
- The difference between spending a lot or a little bit of money to meet the same material handling needs
For example, we quoted a push-back rack system to a customer back at the beginning of February but there was no movement on it until last month. Because we don’t stock push-back we had to go to the manufacturer for a new quote and it came in around $25,000 higher than when we initially pulled it together, all due to the increase in steel prices over four months.
Because we buy our stock items in bulk and our stocking levels are set high enough, we’ve been able to avoid increasing prices so far. The products currently sitting in our distribution center were purchased before price of steel began to rise. We are able to resell them for much cheaper because of these forecasts. Please bear in mind that this only applies to our stock program. Any non-stock orders will reflect the pricing we receive from our vendors.
Before our stock is depleted by other deal hunters, work with your customers to get the best deals you can. We can’t promise that our prices won’t rise but we’re working with Interlake, Ridg-U-Rak, Nashville Wire and our other vendors to keep your costs as low as possible.