Continued Increase in China Steel and Rising Ocean Freight Raise Nail Prices to Highest Level in Recent Years
FOR IMMEDIATE RELEASE:
Continued Increase in China Steel and Rising Ocean Freight Raise Nail Prices to Highest Level in Recent Years
August 14, 2017
The price of steel continues to be very volatile and moves almost daily. Since July 1, the price of wire rod has increased over 10% to 4200 RMB per ton, a 5 year high. Forced steel plant shut downs by the Chinese government for a myriad of reasons and the increase in the cost of iron ore used to make steel are driving these increases. Additionally the Chinese currency has been devalued against the US dollar 1.5% during this time along with a weakening dollar and have raised costs for wire rod to record recent highs. (example: a 1.5% currency devaluation of the RMB raises the cost by $.18 a box based on today’s costs). In just the past 60 days the cost of a box of roofing nails is up around $2.00 per box.
As we have always mentioned to our customers, it is critical to deal with reliable suppliers. As costs have risen dramatically many plants and importers are below water. Our company staff in China is seeing many examples of short counts on plastic cap and coil roofing as some manufacturers try to contain costs.
Additionally, long anticipated freight increases have taken place. Though previously delayed and mitigated, ocean freight, on average, went up $400 per 20 foot container on 8/1, with additional Peak Season increases announced for both 8/15 and 9/1. August-September is traditionally a peak shipping season for large retailers like Walmart, Amazon and Target type stores as they begin shipping their Christmas season goods. Even while contract freight rates are in place it is often difficult to find availability of container space at these lower rates in these higher demand periods.
Demand for construction products remain strong and we see that most nail factories have pretty solid order files. We still have capacity left for additional September shipments though limited. The previous critical shutdown of the nail galvanizing mills is behind us, but the backlog is still being worked through with most orders shipping 30 days later than initially anticipated.
CMI is a market leader in roofing nails, and all types of construction fasteners and will continue to monitor this situation and pass along information that may be helpful in your planning.
Thank you for your continued support and please call with any questions you may have.
Continental Materials, Inc. (CMI) is a national supplier of roofing system component materials and known for BUR (built-up roofing) asphalt with “No Smell”™ odor eliminating technology and its WeatherSeal™ protective packaging, All-Weather™ asphalt felts and coated organic rolls, CMI All-Weather™ modified bitumen rolls, SureGrip™ construction fasteners and roofing nails, Continental’s eco-friendly high density fiberboard roof insulation board and a premium line of SecureGrip™ synthetic roof underlayment products that are sold and used widely throughout the country. CMI has provided value added products and superior service to the roofing industry since 1958.
For more information on CMI products, call (215) 884-4930, visit www.continentalmaterials.com or contact your local CMI Sales Representative.