Precast Inc. - September/October 2008 - (Page 12) REINFORCING STEEL IS MADE FROM RECYCLED (OR SCRAP) STEEL, WHICH HAS INCREASED IN PRICE BY MORE THAN 100 PERCENT SINCE LAST YEAR. The current situation has gotten so out of control that (steel) quotations hold no value. jeopardize our bidding process – we have a serious shortage of steel across the construction industry. for U.S. precast concrete producers. American steel products suppliers are not able to quote confirmed steel prices more than 10 days out. There has been consolidation in the steel industry, which also influences how much of what sizes they may decide to manufacture and what the prices will be. Typical mill prices have increased over 60 percent since December 2007 and steel product producers will not accept fixed price orders with extended delivery terms beyond 10 days. This uncertainty over supply and price for steel reinforcing products means there is no ability to plan or intelligently bid on a project more than one business week out. The ITC (International Trade Commission) has confirmed its antidumping orders against seven foreign steel rod suppliers, meaning that these suppliers will need to pay extra export duties on steel. Courtesy Northern Concrete Pipe Inc. How does the shortage of available steel affect your production? Washabaugh: Every month, we find that different types of wire and rod are not available. The rod required for many large (ASTM-specified) steel areas is becoming scarce. We already have a serious problem obtaining specific sizes of steel and wire rod from the mills. We have three loads of wire that have been on back order for three months now. We have had to send out a letter warning our customers that, due to shortages of materials, we may not be able to honor some of our quotations by the time they get around to being awarded. This is something we have never had to present to them in our history. What can the precast industry do about the reinforcing steel crisis? Washabaugh: There’s not a lot we can do but remain cautious, informed and prepared. You know it is not just the precast concrete industry that is adversely affected by the high cost and shortage of steel. Any consumer products that contain steel – from cars to refrigerators – will soon reflect, in higher prices, the impact of the steel crisis. Right now, committees are working on important initiatives. ACPA (American Concrete Pipe Association), NPCA and the AASHTO Pipe Committee are working to find ways to get the government, both federal and state along with municipalities, to include cost escalation clauses in their contracts. They have submitted examples of What is making the steel industry so volatile right now? Washabaugh: First, you have foreign countries like China and India controlling the supply of steel billet for reinforcing steel STEEL BILLET, SHOWN COOLING AFTER BEING FORGED, REMAINS A HOT COMMODITY ON THE WORLD MARKET. 12 SEPTEMBER/OCTOBER 2008 | PRECAST INC. Courtesy CRSI http://www.jensenprecast.com http://www.jensenprecast.com
For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.