Are You Prepared for Steel Surcharges?
What Is Happening in the Steel Industry?
The United States imports most of the steel used in manufacturing, including construction materials used in buildings and bridges, appliances, automobiles and mechanical equipment, and of course the steel Guard Rails and other Safety products required by the Material Handling industry.
Although domestic steel production ranks fourth (behind China, the European Union, and Japan), the United States is at the top of the list for steel imports in the world, with the majority coming from Canada, South Korea, Mexico, and Brazil, with Chinese steel making up only about 2% of American steel imports.
Historically, the price of steel fluctuates, based on the cost of raw materials, transport, and manufacturing, among other factors, resulting in surcharges rising (or falling), depending on trends in the industry.
Tariffs on foreign steel and aluminum, which were announced on March 1, 2018, and the resulting trade actions by affected countries, are leading to increased surcharges on steel products this year. The effects trickledown through every level of the steel supply chain, from manufacturers to distributors, and finally to the customers who purchase steel products.
How Does It Affect You?
Steel surcharges are having an effect on the Material Handling industry, which relies heavily on steel Pallet Rack, Guard Rails, Fencing, and other accessories to maximize storage and ensure safety at every level of their operations. Roll Form steel is being impacted more than structural steel, but all steel pricing has increased. At the same time, supply has been reduced despite pricing stabilizing at higher than normal rates in the last month or two.
Because long lead times are required for order fulfillment in the Material Handling industry, new steel surcharges are affecting customer pricing, now and in the foreseeable future. Inevitably, demand for reduced amounts of steel will continue to drive price increases. Please keep both the fluctuating price and the lower supply in mind when you receive a proposal that includes pricing deadlines.
At Mathand, we strive to be not just your vendor but your partner in excellence, providing outstanding service to our customers all the way through the ordering process, from customer service to delivery, fulfillment, and beyond. We look forward to helping you navigate the best options for your Material Handling product needs.