August 2008 Issue

Steel Pricing 

With the ever changing concerns of the economy, we at Able Steel Fabricators would like to offer some helpful tips in regards to the impacts of Structural Steel price increases.  During 2008 the price for wide flange structural steel has increased 28% to over $1000 per ton.  Other materials such as plate and tube steel have seen increases up to $1200 a ton.  The current increases can be traced to an expanding global marketplace including the increased competition for raw materials mainly scrap and a weakened U.S. dollar.

At present, structural steel remains readily available within the U.S. with well over 3 months worth of inventory.  Domestic mills are continuing to operate at maximum capacities to fulfill the steady demand.

Several ways to help manage and control costs of projects regarding steel are as follows:

• Early involvement of fabricators with design and end use of materials
• Price protection avoiding escalation
• Potential escalation clauses within contracts so all parties understand the risks associated with the timing aspects of information.
• Clear payment terms for the Fabricator/Contractor securing material and storage.