For any steel or other metal project, finding low prices for your materials is something you’re always searching for. At the same time, understanding the factors that impact your costs will allow you to move forward without too much confusion or concern about situations where prices rise or drop.
At Wasatch Steel, we’re happy to discuss all the elements that go into the cost of our steel bar, steel tube and numerous other steel products. What are the factors that establish metal prices, and how should you be evaluating each as you consider your project needs? Here are some basics.
Just like in numerous other industries, metal and steel price and quality tend to have a direct relationship. You’ll find that the better the quality of the metal, the higher the price. The same is also true in reverse: lower-quality materials will be less expensive.
This relationship makes sense when you consider that a producer or supplier needs to make less money on a lower-quality product in order to still turn a profit. Additionally, customers who are looking for a lower-quality product may not need the same assurances of quality and performance that those seeking a higher-quality product would require.
Now let’s look at some of the specific supply and demand factors that play into the final cost of any steel or metal product.
All metals that will be used in any form of industrial setting will be tested numerous times, typically using what are known as ISO standards. Any metal that has to meet these standards in order for it to be sold will have testing fees attached to the cost of the product.
This is one reason why high-quality products are more expensive than lower-quality products – they must go through multiple tests in order to ensure the customer they are being sold only top-notch materials. In addition to the cost of testing, producers must also verify the resources they are using in order to produce their products. This means confirming that the steel or metal is coming from a reputable and reliable supplier.
If there is any question about the quality or source of the materials, the producer will not be able to guarantee the quality of the product. This means the testing and verification fees must be covered by the price of the metal or steel, driving up production costs.
This kind of testing is enormously valuable to clients, especially those who require specific dimensions and tighter tolerances for their products. It allows them to have confidence that they are getting what they have ordered and that it will meet all the necessary standards.
The price of metal and steel is also impacted by the cost of transporting the product from the supplier to the customer. This cost can vary depending on a number of factors, such as:
These costs can add a significant amount to the price of any steel or metal product. It’s important to keep this in mind when comparing prices between suppliers and should be factored in when making a purchase.
Another major variable that impacts metal prices in many cases is the need to buffer out imperfections in the metal. This is a common occurrence in products that are made of sheet metal, as it’s difficult to produce a sheet of metal that is completely free of defects.
Producers will often need to order more material than they actually need in order to account for these imperfections, which drives up the cost of the product. In some cases, a producer may not be able to order the exact amount of material they need because of these imperfections, which can further increase costs.
You must also considering the degree to which a producer is willing to buffer these imperfections. Some producers may be more willing to accept a certain level of defects in their product, while others may be less forgiving. This will impact the final cost of the product.
While it sounds strange as it’s said, there are a number of steel and metal projects where the metals required don’t necessarily have to be in perfect shape to be used. Consider many processes where the metal needs to go through stamping and painting, for instance — issues like stains or surface finishing inconsistencies may be a problem for other needs, but not for these, as they won’t show up in the final product.
This is a theme that can be applied in various ways throughout steel and metal production. For example, in some cases it might be more important to have a low-cost product rather than a high-quality product. In other cases, the opposite may be true. It’s important for producers and buyers to communicate about what is important to them so that they can get the best possible product at the right price.
These are just a few of the factors that can impact the price of steel or metal. It’s important to be aware of them when pricing out a project or trying to find the best supplier for your needs. By understanding these factors, you can make sure you are getting the best deal possible on the materials you need.
For more on the broad factors that determine the cost of steel or metal materials, or to learn about any of our steel products or services, contact the staff at Wasatch Steel today.