Jason Sandefur

The North American steel market is strong, with domestic mills staying very busy, Nucor Fasteners sales manager Jim Witucki told FastenerNews.com. Although the U.S. economy is slowing, the international economy is doing well and the weak U.S. dollar makes it more difficult for foreign mills to export to the States, while making domestic mill pricing more attractive for export.
“The weak dollar and international demand for commodities are the key components driving the price of scrap and energy,” Witucki noted.
Steel pricing since late 2007 will have increased between 20% – 30% by May 2008, he explained. The hike in steel pricing is influenced by several factors, including base steel pricing, the scrap surcharge and the addition of alloying element surcharges (vanadium, moly, nickel and chrome).
Witucki said each of these factors has increased “dramatically” since the fourth quarter of 2007. Base steel increase announcements have totaled $90 per ton and scrap has increased $80 to $90 per ton since December.
In addition, alloying elements have increased dramatically for medium carbon and medium carbon alloy steel grades.
“Needless to say, these increases have a dramatic effect on our overall cost base, whereas steel is the largest single cost factor to produce our products,” Witucki commented.
Other increases in less obvious areas, such as tooling, plating, packaging materials and medical costs, have contributed to the overall rise in steel prices as well, he said.
“Obviously our customer base is concerned about the increase in fastener pricing. Our objective is to communicate the impetus behind the increases and to arm them with information to discuss changes in pricing with their customers.
“We communicate the factors driving our costs and reassure them that it is cost recuperation and not a matter of greed driving our pricing.”
Nucor Fasteners’ advice to customers?
“Be careful when negotiating contracts and have a provision for renegotiating pricing or exiting a contract should costs escalate beyond a manageable threshold,” Witucki stated. “Increased costs must be shared across the supply chain.” Web: nucor.com �2008 FastenerNews.com