US Metal Supply Price & Fulfillment Effect

Recently we’ve gotten more questions on the increases in price and the increasingly longer lead times from ordering to delivery. Many of our long-time and larger business customers already know. However, new customers, those from industries that do not order often and most anyone from the general public, don’t have a clue. Here’s something we think you would appreciate knowing about the current metal supply.

You’ve heard about chip shortages. Favorites around the snack table here include Better Made Rainbow  (the “over-baked” kind), and La Colmena chili and lime. Those aren’t available on every store shelf either ;-). Semiconductors are also in short supply, and it’s causing disruptions all over the manufacturing world. Fields of mostly assembled vehicles sit there, lacking the electronic components needed to make them run and ultimately find happy homes in garages all over the continent. Supply and demand is an intricate thing. Lumber supply from Canada affects housing building supplies that are connected to steel mill production.

Current Metal Shortage in America

The shortage most Americans don’t know about is of metals. Since the beginning of 2021, companies that use all kinds of steel have been scrambling to buy material to fill orders. After last year’s hard shutdowns and big shifts in what consumers and business customers wanted to buy, (think “commercial” vs “residential” toilet paper) producers closed some lines and changed others over to different products. Trade disagreements, shipping disruptions, recycling levels, and tariffs added layers of difficulty, in which fall-back sources of material were either unavailable or no longer affordable. Big companies tried to source parts and materials in North America. Consequently, their purchasing power sucked material out of the market. The result is that it took from smaller companies who had always “bought American,” like us.

Transportation, Strike Effect on Metal Supply

Then we have the stranded containers. These could be transporting metals from one place to another, but are sitting empty in places where they shouldn’t be. There is also a major strike by the United Steelworkers Union against Allegheny Technologies. It started in late March and is currently ongoing.

What does that mean for us and our customers? Material is hard to find, more expensive, and will take longer to get. We ordered one type of steel tubing in January and are told to expect it in June. Another size has a 12 week lead time. A stainless steel tube needed for another order has a 32 week lead time. We won’t know the actual price of that tubing until it hits our dock.

You’ve been hearing that some conditions now resemble those of the 1970’s well that is true in our industry as well. All of us have been used to a low-inflation, high-supply market for many years, and it’s not that way now. Just now we are starting to hear some voices speaking out on this situation in some of the media. However, until the steel-making and delivery capacity comes back into line with demand, we are in for a bit of a bumpy ride.

Posted In: Detroit Tube Products, News Article

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