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waiting sucks
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Discussion Starter #1
Their outlook on business picking up must not be good at all. Doing the opposite of what you would typically do...

During the past year and a half, our industry has been engaged in navigating waters that were previously uncharted. We experienced increases in pricing from the mills at unprecedented levels and frequency in 2008. While demand remained relatively constant during the first and second calendar quarter of 2008, the third and fourth calendar quarters generated decreases in both demand and pricing. At the same time, inventories at manufacturers and service centers alike remained high. As a result, mill orders were minimal and production capacity was adjusted downward while price erosion continued. The continued price erosion has now reached levels that the mills cannot sustain.



As a result, the mills have announced price increases. We have no choice but to pass these increased costs along to you our customers. Current pricing will remain in effect on orders placed and shipped by August 7, 2009. All orders placed and shipped after August 7, 2009, will be at the increased price. Please contact your MBCI regional manager or your nearest MBCI sales office for up-to-date pricing.



Additional increases from the mills have been announced and will be considerably higher than the August increase. These increases will go into effect on all orders placed and shipped after September 11, 2009. Again, your MBCI regional manager or nearest sales office will have this information available for you. We want to provide this information now to better assist you in quoting projects that will deliver in late September and afterwards.



We appreciate your loyalty and understanding. Please know that MBCI will continue to provide you with quality products, superior service, and strive daily to earn your business.
 

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The HMFIC
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1,748 Posts
i know this feeling very well. last year i had to send the same type of letter to my acct customers. when diesel went up to 5 dollars a gallon i was getting my azz kicked so i had to raise my hourly rate which i absolutly hated to do. i was scared some of my customers were gonna walk.
 

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Steel products in general have gone up. Scrap metal pricing is at lowest levels. It doesn't seem to make sense. Devaluation of the dollar is also a factor.
 

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steel industry in general, slowed down production to match demand, ran inventories down. They could produce way more than there is a demand for but as the mills cut back they will soon have a short supply so they can raise their prices. Pure bs
 

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Marine Organism
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steel industry in general, slowed down production to match demand, ran inventories down. They could produce way more than there is a demand for but as the mills cut back they will soon have a short supply so they can raise their prices. Pure bs
Yea, as much as I know of it, it is BS. Just like the low scrap prices. The steel went up because demand and fuel costs. Demand drops, price of fuel drops, and they still increase the price. BS!:)st
 

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So essentially they are saying prices are so low we can't sustain our business, so we'll have to raise the prices even though deflationary forces are pushing prices lower?

I strongly suspect this company is going out of business.

I think GM and even Carmax are trying the same thing: we can't sell enough cars at a certain price level to sustain our business, so we'll raise prices to increase revenue. Never works - when a company does that it's only a matter of time - you'll sell even less units and further decrease revenue. Even good marketing can't help in this situation.
 

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Many service centers are stuck with expensive material on their floors. The price of steel plate today is a fraction of what it was just a year ago. My price per ton is less than half of what it was in June of 2008. There was a slight increase about a month ago, but prices are still less than they have been in two years. It is amazing what can drive the price up and down overnight, China has an unbelievable impact on the price of scrap. Structural steel is a little less volatile but still follows plate up and down. I have vendors that have thousands of tons of steel they cant move because they bought it 6 months ago trying to beat the price increases...when the bottom fell out of the market, plate prices plummeted as well. As the price slowly comes back up they are able to sell their material, while still at a net loss, its not as bad had they sold their high priced material just to get rid of it when the price was at its bottom. Its definitely a steel buyers market right now. But the next few months are going to be interesting, domestic material may be a thing of the past :(
 

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waiting sucks
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981 Posts
Discussion Starter #14
Many service centers are stuck with expensive material on their floors. The price of steel plate today is a fraction of what it was just a year ago. My price per ton is less than half of what it was in June of 2008. There was a slight increase about a month ago, but prices are still less than they have been in two years. It is amazing what can drive the price up and down overnight, China has an unbelievable impact on the price of scrap. Structural steel is a little less volatile but still follows plate up and down. I have vendors that have thousands of tons of steel they cant move because they bought it 6 months ago trying to beat the price increases...when the bottom fell out of the market, plate prices plummeted as well. As the price slowly comes back up they are able to sell their material, while still at a net loss, its not as bad had they sold their high priced material just to get rid of it when the price was at its bottom. Its definitely a steel buyers market right now. But the next few months are going to be interesting, domestic material may be a thing of the past :(

It is a steel buyers market right now. Unfortunately no one is buying! my biz is down 60% from this this time last year...
 

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It is a steel buyers market right now. Unfortunately no one is buying! my biz is down 60% from this this time last year...
Wish I could help. I buy a lot of steel but its all Plate and structural...
 

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PB Member #26
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956 Posts
I work with copper, zinc, brass and steel and it has been crazy. There is nothing I can do… other that pass increases on to my customers.
 
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