[TheForge] RE: Tool Steel

[Ries Niemi]

You have to remember that steel is a commodity- and as such, any 
sensible businessman, anywhere in the world, prices his new steel at 
that days worldwide price per pound for that type of steel and profile.
Plus, of course, any special transport costs or country specific taxes 
or tariffs.

So if the worldwide price of a ton of A36 mild steel goes up, then the 
dealer, whether he be in Finland or Seattle, will raise his prices.
If the dealer sets his retail price based on what he paid, other 
dealers will come in and buy his stock when his prices are low, and 
steal his customers when his prices are high.
Steel distributors are always gambling, trying to keep enough stock on 
hand, buying less when they think prices are going down, and more when 
they think prices are going up.

Lately, prices are going up. Worldwide consumption is way up.
Both China and India, each with over a billion people, are building 
infrastructure like crazy- roads, buildings, etc. Three Gorges dam, in 
China, used 1.9 MILLION TONS of steel on the one project alone.
Everybody in China wants a TV, a fridge, and a car- and more and more 
of them can afford it.
Demand is much higher now, with the world population almost 4 Billion 
more than when I was born in 1955.

Demand for energy is higher too, of course, making it more expensive to 
make steel, and combined with more people wanting to buy it, that makes 
prices go up.

ries


On Dec 28, 2006, at 12:58 PM, Stephen Viola wrote:

> Well as we are talking energy and market demand of steel etc.. does
> the production increase in China have anything to do with the prices
> and shortages? I know Australia seems to be doing quite well with the
> increase of Chinese business. Not sure how far it has spread globally.
>
> I live in a harbour township so the shipyards have plenty of basic
> steel to scrap.. plenty of brass and copper too! (I'm still keen on
> trying the mogame kane technique).
>
> We don't seem to have a problem with steel supply in type or size just
> yet.. infact they tend to deliver the very next day. The only issue is
> cost really. But the college subsidises quite well the cost of
> materials.
>
> Stephen
>
>
>
Ries Niemi
Industrial Artist

http://www.RiesNiemi.com