Steel-price storm may be looming on horizon

FERGUS FALLS, Minn. – Surging steel prices worldwide are forcing price increases among manufacturers of steel products, and have marine-industry professionals worried about the negative repercussions already being felt.

A weakened dollar, reduced U.S. tariffs, and an increased demand fueled by China’s economic growth, have sparked a 30 to 50 percent cost increase in the steel market over the last two months, according to a release issued by floating-dock manufacturer Shoremaster this morning.

And the market has also been extremely volatile, fluctuating frequently.

Gene Walker, CEO of dock-manufacturing company Atlantic-Meeco, said in many cases steel suppliers have been unable to quote his company a price other than for a given day, according to the press release.

Champion Trailers President Doug Breaux believes the impact of a continued steel-price surge may be tremendous.

“My view of these events is that if these rising prices continue we will be looking at a boating-industry implosion,” Breaux said. “At the beginning of this year we expected great things in boating. However since the middle of February, we have become been impacted by a RADICAL [his emphasis] increase in the cost of raw materials.

“Raw steel prices have gone up by 35 percent at this date and aluminum has gone up 30 percent. I am informed by our steel mill that raw steel will be at $38.00 per-hundred-weight by April 1. In December we were buying steel at $19.00 per-hundred-weight. That is a 100 percent increase in the cost of the raw product from which we manufacture the trailers that go under the boats that dealers want to sell.

“All of this is happening in an amazingly short time frame. The trickle down effects of these types of increases will have a dramatic effect on the cost of boating for the consumer.”

Other marine-industry professionals weigh in
Chris Gaughan, vice president of sales at Floating Docks Mfg. Co. said roofing materials have been especially hard hit.

“Structural materials prices increased by 9 percent, then by 34 percent, and another 36-percent jump is anticipated,” Gaughan said in the Shoremaster release. “In fifteen years of purchasing, I’ve never seen anything like this.”

The rising supply costs will force consumers to pay more for steel-based products, but the rate of increase will vary based on the amount and type of steel used in the product as well as the metal’s current market price, according to Marine Development, Inc. co-owner Steve Otis, quoted in the release.

“It’s very hard to price products at this time,” Otis said.

The Shoremaster statement said that while few steel-based products will see the dramatic price surges currently affecting raw materials, “Even a five percent increase is dramatic to the buyer of a $300,000 dock,” said the company’s project estimator Sam Klinginsmith.

Bidding has been impacted industry-wide. To moderate the effect of price volatility, Waterfront equipment manufacturers Marine Development, Inc., Floating Docks Mfg. Co., Atlantic-Meeco and ShoreMaster have taken steps such as reducing project bid periods and revisiting proposals submitted prior to the recent price increases, the press release said.

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