Steel Tariff and Commodity Prices
2018 Tariff Impacts
The market for commodity items such as pipe and fittings can be very volatile at times; the past month has been one of those times. While the recently announced tariffs are quite significant, they are not the only factor affecting price and supply. Additional factors such as anti-dumping suits, and rising prices of other raw materials have added to the market chaos.
Where will prices go in the next few months? In short, nobody knows. From discussions with many of our key suppliers in the last week, many items are likely to continue to rise. However, there are different factors affecting different items; some will hit a peak (and maybe drop at some point), while others will continue to rise.
Some specific product areas:
- Stainless pipe has been affected by increases in the cost of nickel, along with anti-dumping suits that have reduced supply. With the Section 232 tariff about to take effect, it is likely to continue to increase.
- Carbon steel pipe does not have as much price pressure as stainless, but is still likely to see more increases. While there is currently plenty of inventory overall, occasional shortages in specific sizes may occur.
- An anti-dumping suit regarding flanges is expected to be settled by late March or early April. The market impact is not known.
- While the tariffs affect raw metal and pipe (not finished goods directly), products made from raw steel and pipe will be affected. Nipple and fitting manufacturers are already increasing prices.
- The pricing of domestic product is also rising. Increasing cost of raw materials is one factor. Another is the matter of limited capacity.
What is Cooney Brothers doing?
- We have increased our stock positions on many pipe, fitting, and flange items to buffer against any possible shortages.
- We are staying in close contact with key suppliers to adjust our inventory as soon as conditions dictate.
- With the current volatility, we can only quote prices for as long as our suppliers will hold them. In some cases, this is as short 1 to 3 days. For smaller, MRO orders, this should have limited impact. For larger, project orders, this may be a significant issue that needs to be considered. In those cases, let us know your needs and timing and we will work with you to reduce the uncertainty as much as possible.