Steel/Aluminum Tariffs (just bent me over)

Can someone please tell me what the hell is going on?!

I called my supplier today to get some prices so I can bid a job and was basically told that they couldn't give me a price on anything unless I was ready to come in and order/pay within a few hours. 

Apparently aluminum is fluctuating astronomically. As much as 300% per day for some items. (Per my supplier) 

This means I basically have to walk away from a potential job that probably would have net me a challenge car. 

Fortunately, this issue only directly effects my primary business in a fairly inconsequential manner, but until the market stabilizes this will basically kill off all my side business that funds my recreational activities. 

I didn't even know we were facing tariffs until last week as I'm deliberately living with my head in the sand, so this was a bit of a surprise. 

Anyone have any information as to how/when this situation might stabilize? 

You didn't know that there was a trade war being discussed by the top elected official in the United States?  

About 3 years 

" Anyone have any information as to how/when this situation might stabilize?  "

The stock market would also like to know this information. 

I doubt this topic can be discussed without spiraling down to a concrete patio debate.

Yeah, this is prime patio fodder, I had to write my post three times before I figured out what might not get me in dutch with the mgmt.

In reply to pres589 :

I did not know. I had to quit following the media/social media back around 2016 due to anxiety.

Yeah, well, I imagine that with the replies here already, you can probably piece together a lot of what's going on / why you're hearing what you're hearing from the metal vendor.

Have your customer pay for the materials so he takes on the risk. Some more info on how you run your business would help. Sounds like you have the cost price fluctuation risk currently. You can either continue to own that risk and hedge with aluminum futures (doesn’t sound likely that you can do that), or get your supplier to take on some of the risk or transfer it to your customer.

The USA and China are currently negotiating tarrifs and what items will be affected - this negotiation was scheduled to be complete in 30-days. That was a few weeks ago. Don’t count on it getting done any time soon.

Good luck.

Yea, suffice to say the materials market is a E36 M3show right now. No one will hold pricing for more than 24 hours out. 

On the bright side, scrap has apparently gone up and I have a pile of junk I need to dispense with.  

In reply to smokindav :

I usually build in 20-30% over cost on materials to cover unknowns and pricing fluctuations, but with such radical fluctuations, material fluctuations alone could easily double the final bid sum because of the size of the project. 

I could offer a quote and add the stipulation that cost fluctuations will get refected in final invoicing, but that pretty much guarantees I won't get the job. So I just declined the job altogether.

However, this particular project was basically an opportunity to build a prototype on someone else's dime. So it's not just "a" job I lost. 

All tariffs are taxes.

All taxes are are paid by the consumer.

Always.

Duke said:

All taxes are are paid by the consumer.

Always.

Only true for goods for which there is perfectly inelastic demand:

https://www.cs.cmu.edu/~ref/econ101e.html

I read an article in the WSJ this weekend about how the value of recyclables is plummeting right now- basically, China won't buy our E36 M3.  They put in place all sorts of purity requirements for baled recycled bulk material to be imported and there's no way any of the stuff coming from the U.S.A meets the requirements.  Plastic, cardboard, glass- all this stuff is essentially worthless now.

Not sure how it affects steel or aluminum, as those tend to be easier to sort and recycle.  My last round I was getting about 6 cents/ lb on steel and about 60 cents/ lb on aluminum cans, maybe 40 cents on cast aluminum.  

EDIT: Just checked, looks like scrap AL cans are going for about 30 cents/ lb now- maybe 1/2 of what I got a few months ago.  Steel's around 7-8 cents, so up 20% or so.

Of course, the price of new material is a different story, apparently...

Looks like prices are up about 10%, on news of a 10% tariff. Huh. Imagine that.

The morning after the tarrifs were even suggested my price on 5051 sheet went up 32%. People started hoarding it like they do ammunition after a mass shooting. The phones at the supplier were going crazy with huge orders. It took 26 hours to get my stuff instead of 15 minutes

I have just been sucking it up and paying the wildly fluctuating prices

I see no way this thread wont incur a concrete tariff.

Pete

Hopefully everyone got their challenge car steel early...

In reply to stafford1500 :

 

EDIT: Just checked, looks like scrap AL cans are going for about 30 cents/ lb now- maybe 1/2 of what I got a few months ago.  

That's pretty good, every time I check on AL cans, it's always 24 cents in my area, from when I was 12, to now, almost 50. I seem to always miss the peak's. 

I remember a copper fluctuation issue 10 years ago?   Guys would quote me with a 3 day expiration.  It takes our industry 2-3 weeks to find out.  

Yeah, good luck with that.  

Tariffs are a time honored tradition amongst countries.  Remember when Japan was supposedly dumping their cars on us and it was hurting the Big 3?  They fixed that problem very quickly.

They come and they go. Nothing to get riled up about.

In reply to carguy123 :

My company has bunch of custom trailer manufacturers as clients. They're all pretty pissed.

I'm sure it'll stabilize in a few months as goods are rerouted from tariffed countries to other countries and from other countries to the US but it's frustrating for them in the near term.

Check the price today/tomorrow if buying. My Alcoa stock is taking a huge hit today. Good thing I am not a rich guy and only have 77 shares.

Looks like the ease of sanctions with Russia is causing the current steep discount. "Alcoa shares dive 12%"

In reply to carguy123 :

Tell that to all the small businesses going under under this latest BS plan. Incredibly dumb decision 

Are there any American steel and aluminum producers anymore? I would assume they would be able to give a solid price since the order shouldn't be directly effected by the tariffs. 

I'm being naive again aren't I?

gearheadmb said:

Are there any American steel and aluminum producers anymore? I would assume they would be able to give a solid price since the order shouldn't be directly effected by the tariffs. 

I'm being naive again aren't I?

There are.  I think they basically view the tariffs as an excuse to gouge.