Steel Cost Effect on Nail Pricing…
FOR IMMEDIATE RELEASE:
Steel Cost Effect on Nail Pricing…
Abington, PA (03/16) – There have been some very recent spikes in steel prices in China since the end of the Lunar New Year period. While this is being caused by a confluence of factors the simple reality is that most steel production in China is government controlled, and the prices have been at unsustainable low levels for some time. Steel prices have been at a twenty year low.
Chinese steel mills have been ordered to cut production for various reasons including environmental, pollution control, etc., but by taking supply out of the market the net effect has been some panic and short term steel shortages, that should ease up.
These cost drivers impact China plants very quickly because most nail plants receive small quantities of steel frequently, so they are not sitting on large stockpiles of raw material. Therefore the cost impact is effectively immediate.
Additionally, freight is still a huge component of cost, and also uncertain. In most cases this is 20 – 30% of the cost of product delivered to the US. Freight has been a roller coaster where the early January increases have fallen back in some cases to the lower December rates.
All-in-all these are very uncertain times in the nail business. Please plan your needs accordingly.
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2016 China Steel Price History |
|
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Date |
Steel Cost in CNY ($6.50 Yuan ~ $1 USD) |
|
Jan 1 |
$1,750* |
|
Feb 1 |
$1,860 |
|
Mar 1 |
$1,860 |
|
Mar 2 |
$1,900 |
|
Mar 3 |
$1,950 |
|
Mar 4 |
$1,950 |
|
Mar 5 |
$2,000 |
|
Mar 6 |
$2,150 |
|
Mar 7 |
$2,400 |
|
Mar 8 |
$2,600 |
*each $100 CNY is equal to about a $.20 increase on a box of 1-¼ coil roofing nails
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For more information on CMI products, call (215) 884-4930, visit www.continentalmaterials.com or contact your local CMI Sales Representative.