With steel prices on the rise, we have no choice but to look at increasing our prices. We don’t want to do it, but here’s the deal.
Steel Prices On The Rise
Prices on all of our raw materials have been increasing over the last few years. No – it’s not just this administration. Things have been in the works for the last several years that have added up to this dilemma.
China produces over fifty percent of the world’s steel products. What we have come to understand also is that a product may say “US Steel” but that may be the company name. The steel may be coming from somewhere else. With steel prices on the rise, everyone is in the same boat. All products that use steel will increase in price.
When we called to find out about availability and pricing this week, we were shocked to learn that prices have gone up over fifty percent since the last time we got steel earlier this year.
This is about a ninety percent increase from when we started the business nine years ago.
It’s Not All Steel
When we calculate the cost of creating a piece, we include the cost all of our raw materials (materials plus shipping/handling). And we add in Mike’s labor for design, cutting, preparing, finishing and shipping the piece. We also have incidental costs such as shop space, electricity, equipment maintenance, etc. You get the picture. Steel prices are just a part of the equation.
What’s even more concerning is the availability of the steel. At first we were told that our supplier didn’t have any. And, they didn’t know when it would be in. It seems that their supplier is a little hit and miss on what they can supply. The US does produce steel. However, a larger share of the steel products come from China, Japan, and India. There’s the rub.
With timber and wood products through the roof right now and increased building (supply and demand), builders are looking at alternatives. Steel is being used more and more in residential construction. Just another factor in our ever changing world. And we wonder why steel prices are on the rise.
We were able to stock up this week. The price tag was a little shocking. We figured we were better off getting some at the current prices before they go up again. Time to sharpen our pencils and look at our pricing. With steel prices on the rise, we really don’t have a choice.