Our current administration is playing hardball with tariffs against China, plus other large steel and aluminum exporters to the USA. We all hear the headlines in the news, but what does this mean to you as a buyer of metal in the awards and personalization industry? Will the steel and aluminum tariffs cause metal prices to go up? Will there be metal shortages? What can we expect and when? We are here to ease your mind by providing knowledge and guidance.
Yes, these political conversations are currently causing prices to go up on metal, including the specialty metals used in our industry. Some of our suppliers have pushed for immediate price increases, averaging 18% on aluminum, and a 15% jump on steel. Conversations with our mills and fabricators are consistent, all expecting similar increases on other metals as well, like brass, brass-plated steel, copper, and nickel silver used by the awards industry. These price increases will impact the engraving and printable metal stock sheets and blanks.
What can you do as a user of metal products? We have a few recommendations:
- Communicate with your suppliers and customers. Let them know you’re aware of the situation in the news and that you will be monitoring and protecting them as changes happen.
- Anticipate future needs and order materials as soon as possible. Don’t buy above your comfort zone or bank account, but check with your re-order customers to verify their intentions on future orders and take conservative and well-researched risks to carry inventory.
- Encourage your customers to place orders now for future needs. See number 2, above.
- Consider blanket orders that lock in prices to satisfy future requirements. You may not be aware that many of your suppliers will accept blanket orders for your total expected annual purchase quantities. With a blanket order, your pricing reflects the total annual volume, and provides for releases at specified intervals over a 12-month period.
- Protect your margins as the costs rise. Only you know how much your profit margins can absorb.
What are we expecting and doing?
Identification Plates is currently increasing our metal inventory to secure our forecasted needs of our in-house custom manufacturing jobs as well as stock items for our customers.
We expect additional price increases going into effect this summer (2018). We don’t currently expect any shortages on metal, but you never know, given our experience here in Texas at the gas pumps after Hurricane Harvey. Based on years past, we expect to see the price spike and then self-correct. Much like the way we saw gasoline at $4.00 per gallon, then the price reset to the new normal of around $2.00 - $3.00.
Please let us know if you have any specific questions you’d like answered in a future update. We will keep you informed periodically, as changes happen and the situation becomes even murkier or crystallizes.
Bob Shapiro, CAS
Director of Business Development
Identification Plates, Inc. (ID-Line)