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There is reported to be a world wide shortage of steel starting about Dec. There are reports of shortages and price increases from 20% to 100%. China is reported to be consuming much greater amounts of steel in their manufacturing and exporting.


I am sure that GM and their suppliers have a price contract for a fixed period of time, but this could mean the end of rebates and the beginning of price increases.
 

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It actually started going wayyyy up about 6mos ago. As for contracts b/w OEs & suppliers, it's getting to the point now where the suppliers may have no choice but to go after price increases... I work for one such supplier. A different viewpoint though says the price hikes are shortlived... We'll see...
 

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If the economy was better, I'd be more concerned. My buddy delivers steel to local factories. He mentioned a shortage on some types, but pricing has stayed the same. Rebates will start to decrease, but I don't think its a direct result of a world wide steel shortage.


My$.02
 

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I am in the business of selling steel locally. We own the only service center within about 180 miles. We have seen an increase of 200% since January on pricing and we are now beginning to see a shortage of materials. We rarely had to wait for material longer than a week. We are now having to place orders for delivery into the end of May and beginning of June.


In the past, we were able to know what pricing we were buying material for when the order was placed at the mill. We were also able to get just about anything and any quantity that we wanted. We are now on allocation (as are all companies that use steel) which means even if we order 100 tons of something, the mill may only give us 20 tons and we are left finding the rest. And the price of the material is not determined until it is loaded on our trucks. Every mill in the country has added another surcharge every single month starting February to the tune of $20-30 per hundred weight. To give you an idea, we used to buy the majority of our material for $18-25 per hundered weight and we are now buying material for $45-65 per hundred weight.


We also sell welding and industrial supplies which are all affected by steel. 90% of our 800 suppliers have sent us notice that effective the date of the notice, they would be increasing prices or adding a "steel surcharge" to every one of their invoices ranging from 3% to 40%.


I have a great deal of contacts and talk with managers of steel service centers around the nation, as well as plant managers at all of the largest steel mills and this is common around the nation. Some parts of the country haven't been affected as much, and others have.


The prices of our toys (trucks) *will* go up. I know that the contracts GM, Ford, and Dodge had with mills for the sheet metal they use are be changed. The pricing may still be the same, but the mills have told them that they will be charged a per ton surcharge on everything they buy which has already increased several times.


It's really hard to deal with, but it seems to be the same way with all major materials (plastic, wood, leather). Anyway, just thought I'd offer some insight from an insider.
 

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If Bush'y or the next group of shysters don't do something about all the exporting of our steel then we better start making bombs out of plastic ....

China will be the largest steel producer in the world ... Estimation of when I believe was 2010 or sooner ... They are buying every thing the can get there hands on to melt ..... Forget the price of cars, GM already has a foot in China ....

It's more serious then people think, think of the jobs, Were in trouble .....

Mac
 

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so true mac, so true.......
 

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This is how it has been explained to me by a couple of collegues of mine whom are large consumers of steel:


The Peoples Rebublic of China (PROC) have been stockpiling all the steel they can get thier hands on for quite a while now. All of the steel being purchased from PROC has been at an artificially low price such that it would make it near impossible to compete in North America with the labour rates and energy costs. This has in turn caused the close of many mills and foundries in both the USA and Canada. Now that the supply of processed steel has been choked in the homeland who do you turn to. You got it - the PROC. Oh, but wait, now there is an astronomical rise in the cost of steel. Now its up to the capitalists to try and revive thier own steel industry to help stem the costs of the steel increases. The biggest problem is firing up the mills again only to have the PROC subsidize the industry and depress the price until it is not feasible again. Certainly a catch 22 here. I'm not too sure if the WTO has any stroke here, but that would imply that the PROC would actually have to follow a ruling on this issue. I don't think so. So now you're left with the steel industry becoming the next Agricultural mess where everybody is so subsidized that it's hardly a business anymore and the only people making money are the corporate suplliers. Waddaya do?


 

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Dont worry Mac, some of the tail fins are already plastic on the tomahawk or cruise missle (cant remember which one it was) already, we make them in my plant! Its a pretty good sized fin!!!





Not only is China taking a lot of the maunfacturing work from this country, now they are taking all the steel also... It has messed us up on a few projects letely not being able to get materials....
 

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You could reduce the amount of steel used by just making the whole truck out of PROTEC!
 

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China is building something like 18 cities around Bejing (sp) for the Olympic Games. Not only are they buying up steel, they are also importing substantially more oil, further running oil prices up.


I'm an architect and we are seeing the steel costs on our bids impact overall project costs. I am also getting change order quotes that are good for only a day.
 
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