Aluminum Prices Up Again

Mickey_D · Jun 5, 2018

Trident, the biggest distributor in our area, just went up another $.30 a pound yesterday from the new aluminum tariffs that went into place over the weekend. We have gone from $1.65 a pound a year and a half ago to $2.65/$2.75 (depending on order size) a pound now. So far we have been able to pass through most of these increases but customers are really starting to squeal. What is everyone else seeing?

Milland · Jun 5, 2018

Why are they squealing at you? Isn't there somebody else they should be complaining to?

Larry Dickman · Jun 5, 2018

Milland said:
Why are they squealing at you? Isn't there somebody else they should be complaining to?

Yes, but his ears are too full of pig shit to hear anything.

I just quoted a bunch of 7075 plate, and the prices are all over the map. I think there's a lot of "Pulling it out of my ass" going on.

Pass it off to the customer? Ya, get real.

Fish On · Jun 5, 2018

Mickey_D said:
Trident, the biggest distributor in our area, just went up another $.30 a pound yesterday from the new aluminum tariffs that went into place over the weekend. We have gone from $1.65 a pound a year and a half ago to $2.65/$2.75 (depending on order size) a pound now. So far we have been able to pass through most of these increases but customers are really starting to squeal. What is everyone else seeing?

Pretty much the same as you. $1.61/lb for .125 sheet in the fall, $2.60 last week.

I just thought it was bad in February, when it went to $2.02/lb.

My sales guy said the biggest problem with sheet right now is where to get it. As of last week when I ordered, they weren't allowed to purchase anything from China or any of the Russian oligarchs, the tariffs weren't even in play yet. What that leaves is just a few random mills throughout the world (he says they've been having to source some from Africa, some from Malaysia, etc. The issue is, those mills know they are the only game in the world, and are charging accordingly.

Extrusions haven't risen as much, because many of those were already domestically sourced. Much of our sheet wasn't and still isn't domestically sourced.

I sell directly to the end consumer, and I'm strictly in the disposable income category (recreational aluminum boat accessories), so there's only so much in the way of price increasing I can do before my customers decide to go without. It's definitely going to be interesting seeing how the rest of the year shakes out.

Guest · Jun 5, 2018

Larry Dickman said:
Yes, but his ears are too full of pig shit to hear anything.

I just quoted a bunch of 7075 plate, and the prices are all over the map. I think there's a lot of "Pulling it out of my ass" going on.

Pass it off to the customer? Ya, get real.

Agree, a couple weeks ago I placed an order for some steel and some aluminum that I had quoted about 2 months prior the steel that I do not know the origin of went up 10%, the aluminum that I know was domestic went up 30%. Oddly enough those increases are opposite of the tariff percentages. I believe suppliers are just throwing crap on the walls and see what sticks. They will see what they can get away with blaming tariffs for price increases without effecting sales. What I wonder are the price increases caused by the mill, the distributors or both? Maybe some high roller in here that buys enough to go mill direct can clue us in. I never buy more than 500# at a time because most parts I make will fit in your shirt pocket.

david n · Jun 5, 2018

The price of scrap hasn't gone up much........................What's that tell ya about prime pricing? :rolleyes5:

Bend over 'n take it....................... :bawling:

Fish On · Jun 5, 2018

Dualkit said:
Agree, a couple weeks ago I placed an order for some steel and some aluminum that I had quoted about 2 months prior the steel that I do not know the origin of went up 10%, the aluminum that I know was domestic went up 30%. Oddly enough those increases are opposite of the tariff percentages. I believe suppliers are just throwing crap on the walls and see what sticks. They will see what they can get away with blaming tariffs for price increases without effecting sales. What I wonder are the price increases caused by the mill, the distributors or both? Maybe some high roller in here that buys enough to go mill direct can clue us in. I never buy more than 500# at a time because most parts I make will fit in your shirt pocket.

No tariffs were put in place until this past weekend. Prior to that, we were just forbidden from buying from certain places. With that, the rising prices were just supply/demand - can't buy from certain places = smaller supply.

gary-sc · Jun 5, 2018

I just got a quote for 304 flat bar (USA origin), 200 sticks, the price is 68% up from my order in September last year. Stainless sheet, also USA origin, is up 40% since my order in December 2017.

The flat bar product is mainly materials with little labor, the increase will probably kill this production run and I can't really do much about it (consumer product.)

Our biggest production customer's product is 20ga 304 sheet and is also a consumer product. I've decided to eat the material increase out of my profit on this one to keep the run going for at least a year to see if things settle down. This customer competes directly with China, who directly copied his product. China was already much cheaper along with the expected crappy quality, but now with my materials up another 40% I won't be able to hold on to it forever.

I'm really interested in hearing how other shops are making decisions around the material price increases. For us it's summing up to some jobs you can and maybe have to eat it while others you have to pass it on to the customer.

david n · Jun 5, 2018

A month ago(and again soon), I had a pow wow with one of my customers which everything I ship to him is 6061. Prolly buy roughly 20-30K lbs of Ali a year for that account. He runs a bunch of parts in house also so he sees the increases and understands my numbers need to go up. He doesn't like it much, but that is the way it is. Give your customers a holler and get it sorted out..............either they keep ordering or they don't............... :ill:

LKeithR · Jun 5, 2018

I just bought about 230 lbs. of 5052 sheet yesterday for $2.25 (CDN) per lb. Last order (early January) was $2.00 per lb.
I presume the material is domestic but I never actually checked...

Mickey_D · Jun 5, 2018

david n said:
The price of scrap hasn't gone up much........................What's that tell ya about prime pricing? Bend over 'n take it.......................

Our prices are up a whopping 2 cents a pound for chips and a nickel for solids. Big F'ing Whoop!

Mickey_D · Jun 5, 2018

The ones that I love the most are those who want a quote at the start of the year and demand that it be honored all year long. They go into freakout mode when I invoke the "we reserve the right to refuse purchase orders for any reason" clause. One said that she was sure that she could get the material cheaper than we quoted (told her if she could I would give her a job as a buyer for me) and they would just buy it and send it over. Told them that would be great. Called back a couple of days later griping about material prices and accepted my new quote.

Larry Dickman · Jun 5, 2018

Mickey_D said:
Our prices are up a whopping 2 cents a pound for chips and a nickel for solids. Big F'ing Whoop!

to have a scrap dealer actually cough up an extra 2 cents is really quite remarkable.

david n · Jun 5, 2018

Larry Dickman said:
to have a scrap dealer actually cough up an extra 2 cents is really quite remarkable.

Scrap yard has nothing to do with it.............their prices are based on supply and demand. Cheap scrap usually means a glut of inventory at the mills. Tons of scrap inventory ≠ high prices. Some one is taking advantage of all this tariff talk. Kinda like when there's a small blip in the the oil supply chain.......a refinery has a shut down/accident...........it's all over the news........next thing you know gas jumps $.30 nationwide overnight.

broke · Jun 5, 2018

Had a visit form a material salesman today saying a big domestic Al supplier is closing books for 2018 as they can't keep up. We will be able to stock up on some material now for jobs we already have but we could find ourselves in a bind if we can't get domestic material for 6 months.

I have been letting customers know that the price on an RFQ is definitely only good for 30 days. Some of these swings could have you working for free if you aren't careful.

SND · Jun 5, 2018

david n said:
The price of scrap hasn't gone up much........................What's that tell ya about prime pricing? Bend over 'n take it.......................

That's interesting, prices for scrap here were just about double a few weeks ago when I last brought some(and had crept up a bit for a few months prior). 316 turnings went from about $.30 cents to I think $.52 or .55. the 17-4 stuff went from .10 to .30cents.. Alum up too. I got more going in there in a few days, I'll see if it went back down or what's going on. It's almost worth cleaning the machines now...

Seeing scrap go up like that gives me a very 2007-2008 feeling.

Mud · Jun 5, 2018

I just ordered a real small quantity of 11/16 6061 round bar - 10 lengths. Lowest was Admiral at $2.25, highest was TW at $4.36. Last order 18 months ago TW was lowest. 4 other quotes were spread randomly between those extremes.

Mebfab · Jun 5, 2018

If scrap goes up my neighbors will be happy. and they will rob me blind. THey have been pulling up yard signs to get the little metal frames, I have seen them pull aluminum gutter downspouts off houses

Oldwrench · Jun 5, 2018

gary-sc said:
The flat bar product is mainly materials with little labor, the increase will probably kill this production run and I can't really do much about it (consumer product.)

Under volatile material-pricing conditions, the first thing to do is simply stop quoting marginal jobs where all you make is a markup on the material. That is the very definition of joining the Race to the Bottom. Expensive, sophisticated machine tools are for high value-added work where material cost is a small part of the total. Let the garage shops bid on stuff to go broke on, like consumer products that compete with the Chinese.

Mud · Jun 5, 2018

Admiral told me SAPA has changed their name to Hydro. What the backstory on that?

Aluminum Prices Up Again

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