28 Mar March 2018 Newsletter
As I write this the construction industry is facing unprecedented price increases in steel along with a corresponding shortage of steel. The reason for this is the recently announced steel tariffs which caused a lot of steel buyers to place a lot of orders thus exacerbating the problem. We are doing all we can to service our customers in a timely fashion. Please bear with us during these trying times.
For pricing information on all the products we distribute see below:
Prices for steel construction products have risen steadily since last fall and President Trumps’ decision to impose a 25% tariff on imported steel and 10% on aluminum effective March 23rd caused prices to skyrocket even before the tariffs took effect. Scrap steel posted up by $35/ton on March 7th. In mid-March, distributors of steel construction products and rebar fabrication shops placed orders for several months’ supply with mills in hopes of beating more future price increases. This buying frenzy, coupled with already strong demand and limited supply of some steel construction products, has caused shortages of some steel construction products in the US, which may last for several months.
Resin manufacturers increased prices in March and have already announced another price increase for April. There is also a global shortage of several types of resins, which will drive resin prices even higher in the coming months The nationwide truck shortage has caused freight rates to spiral upward and lead times for orders to be delivered has been extended, especially truckload orders, as demand is far exceeding the supply of tractor trailers across the nation.
Domestic rebar mills increased prices between $40 and $50/ton within a few days after President Trump’s announcement to impose a 25% tariff on imported steel. This is the fourth consecutive month than domestic mills have increased prices and domestic rebar is now 20% more than it was on January 1st. Most domestic mills’ rollings are sold out through April and May. Distributors and rebar fabrication shops do not know what their costs will be for shipments in April and May, as analysts expect domestic mills to increase prices again in early April. If the mills do increase prices in early April the orders will be billed at prices in effect at time of shipment (PTOS). Brokers who owned the limited supply of imported rebar quickly raised prices after the imported steel tariff was announced. In some instances brokers were selling their inventory of imported rebar for higher prices than domestic mills as distributors and rebar fabrication shops were willing to pay just about any price so that they could fulfill orders already booked. There are severe shortages of most sizes of rebar throughout the US and with high demand and limited supply, shortages are expected for the next several months. If you have upcoming projects that require rebar, even projects that will not start for several months, you should place orders as soon as possible to try avoid your projects being delayed.
Concrete reinforcing wire mesh manufacturers, which increased prices by approximately $45/ton in late February and early March announced another price increase for April. One manufacturer announced a 13% increase while most others will increase prices by 10%. As distributors booked several months’ supply after the tariffs were announced, some manufacturers are experiencing stock outs of some sizes of concrete reinforcing mesh. This coupled with the nationwide shortage of flatbed trucks have caused lead times for truckload orders to be as much as one week to two weeks. Wire rod manufacturers have already announced another hefty price increase for April, so concrete reinforcing wire mesh manufacturers are likely to increase prices again in May.
Both Wire Bond and Hohmann & Barnard announced a price increase for all steel masonry accessories effective the first week in March. Both manufacturers will increase prices by approximately 15%. All orders placed with Wire Bond prior to April 4th, the effective date of their price increase, must be shipped by April 16th to be invoiced at current prices. All orders placed with Hohmann & Barnard prior to April 2nd, the effective date of their price increase, must be shipped by April 13th to be invoiced at current prices. Both manufacturers will only honor job specific quotes for 30 days, due to the volatile steel market. As with concrete reinforcing wire mesh, expect both manufacturers to increase prices again later this spring due to the pending April wire rod price increase.
Dow Building Solutions, a division of The Dow Chemical Company, announced a price increase on February 26th of 7% on all Styrofoam extruded polystyrene insulations effective in April. All orders placed on or before April 5th must be shipped by April 12th to be invoiced at current prices. This follows Kingspan’s price increase of 7% in March on their entire line of Greenguard extruded polystyrene insulations. Owens Corning will also increase prices in April by 7% on all Foamular polystyrene insulations. If you have any projects that specify extruded polystyrene insulation, we strongly advise you to buy out these jobs by the end of March to avoid paying 7% more if you place them in April.
GCP Applied Technologies, formerly Grace Construction Products, announced an across the board price increase of 4% on all commercial waterproofing and air barrier products. Current prices will be honored on all orders placed prior to March 22nd and shipped by April 1st.
Prices for all lumber products continued to rise in March and analysts expect weekly price increases to continue at least through April and even into May, due to high demand. Lead times for mill direct truckloads of some sizes of SYP dimensional lumber are now as much as four weeks due to high demand and the nationwide truck shortage. Many lumber dealers and building material distributors are experiencing stock outs due to the extended lead times. If you have projects which require these products, consider buying them out as soon as possible to avoid paying higher prices in the weeks to come and to ensure that you have the lumber on site when needed.
Several polyethylene sheeting manufacturers increased prices by approximately 6% the third week in March due to their increased costs for resins. Other manufacturers that did not increase prices in March will increase prices the first week in April. If resin manufacturers are able to get the announced $.05/LB price increase in April, polyethylene sheeting manufacturers have indicated they will increase prices again by the first of June. If you have any projects which require polyethylene sheeting, we strongly urge you to buy out these projects as soon as possible.
Pecora Corporation announced on February 27thth a 6% price increase effective April 1st on their entire line of silicone products. The global shortage of resin and other raw materials, which has caused significant price increases for resins and other raw materials over the past few months, as well as increased costs for transportation were cited by Pecora as the reasons for the price increase.
Mar Mac Wire increased prices on March 23rd on their entire line of Contractor (imported) line of concrete accessories and other steel products and on their Premium (domestic) tie wire. The percentage increase for imported items varied by product and ranged from 5% to 25%. Prices for Premium black annealed tire wire products increased by 5% and plastic coated tire wire products increased by 3.5%.
Wholesalers and brokers of imported steel concrete accessories as well as domestic manufacturers, increased prices just after the 25% tariff on imported steel was announced and have indicted to expect further price increases in the coming weeks. If you use, snapties, tie wire, bar supports, rod chairs, anchor bolts, mudsill anchors, nails, etc. on your projects, consider buying heavily now soon as prices will continue to rise over the weeks and month ahead.
The producer price index (PPI) for final demand in February, not seasonally adjusted, increased 0.3% from January and 2.8% year-over-year (y/y) from February 2017, the Bureau of Labor Statistics (BLS) reported on March 14. AGC posted tables and an explanation focusing on construction prices and costs.
Click here for the latest update on the construction economy from Ken Simonson, the chief economist of the AGC.
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Our Associate Profile this month is of Chris Broderick, Rebar Sales Manager, based in Columbia, SC. Chris was born in Niagara Falls, NY and graduated from Niagara University with a Bachelor’s Degree in Marketing. Chris and his wife, Madeline have three children, Alexis (25), Alec (21), and Max (17). In his time off Chris likes to fish, hunt, ski, golf, hike, and any other outdoor sport. Prior to joining us Chris was with Commercial Metals Corp. (CMC) for 21 years in a variety of rebar sales roles. Chris has been a great addition to our team.
Our management article this month is, Bad Leaders Will Drive Away Your Talent. In today’s world where it’s so hard to find good people we can’t allow bad leaders to cause employees to quit. Hopefully this article will give you some tips on how to avoid this.
March’s Management Article
Bad Leaders Will Drive Away Your Talent
By Steve Keating
One of the main responsibilities of a leader is to fire their people! Not actually fire them but fire them up.
Fire them up as in motivate them, challenge them, coach them, help them grow and help them succeed, again and again. If you’re in a leadership position and you’re not doing those things on a daily basis then you are simply not leading.
If you’re in a leadership position and you’re not actually leading then you’re hurting the people you’re supposed to be helping. You’re also not helping the organization that has placed you into that leadership position and provided you with the opportunity to lead.
Don’t make the mistake of assuming that your position makes you a leader. The only thing, the one and only thing that makes you a leader is leading. If you find yourself in a leadership position while lacking the skills required to truly lead then it is YOUR responsibility to seek out the help and training that you need to be a successful leader.
Don’t wait for someone else to make you a leader, don’t expect the help you need to come to you. If you’re going to lead others then you must first lead yourself so lead yourself to the coaching you need to become a true leader.
If you’re following someone in a leadership position who lacks the skills to lead then you have three choices.
You could just complain about it. You could point out their failings at every opportunity and become a drag on the entire organization. I’ve done that and it didn’t really work out well for anyone, especially me.
You could, and should, attempt to lead up. By that I mean help fill the gaps of the person who is supposed to be leading you. You’ve no doubt already identified those gaps so try to use your own strengths to minimize the challenges those gaps cause within your company or organization.
I’ll warn you that you may not get the recognition you deserve for leading up. Some people in your organization might even call you a suck up or worse. Even the person who is supposed to be leading you may be a bit leery about your motives but you’ll be doing the right thing. I can say with a high degree of certainty that doing the right thing will eventually pay off; it might take longer than you want but you can’t go wrong by doing right.
The third option you have is to flee. Just leave, go find employment elsewhere. This is not as good an option as it may seem. While you left a problem behind you have no guarantee that you’re not just walking into another one. You also slow your own development by just leaving when the going gets a little tough.
You may get lucky and join an organization that provides you with a true leader who works hard to develop and mentor you. If that’s the case then you’ve truly struck gold. The problem I have is with the luck part; I simply don’t like depending on luck for my success.
I think most successful people would tell you that they made their success, they didn’t just luck into it.
So I’ve written a bit here to leaders and the people who would follow them. I also want to say something to a third group. That would be the folks who put people who can’t lead into leadership positions.
The truth is most organizations were able to “get away” with that for a long time. There used to be plenty of followers to go around and if an organization lost a few here and there they just plugged in some new people.
One of the key considerations an organization must make these days is who is leading who. If you have good young talent being led by a non-leader in a leadership position that good young talent will leave. That’s not a guess, that’s not a maybe, they will be gone, period. And they are getting harder to replace by the day.
Whether you’re in Human Relations or another senior position within your organization, if you’re responsible for placing people into leadership positions then you better make sure you’re putting actual leaders into those positions.
There is almost no bigger waste in business today than giving a bright, motivated potential superstar in your organization to a person in a leadership position who lacks the ability to help that bright, motivated individual achieve success.
There will always be some leaders who are better than others. You need to be certain that your best people are being led by your best leaders. That’s the reality of the business world in which we live today; no organization can afford to have their top people led by people who are not leaders.
You may want to consider dealing with it before it’s dealt with for you.
In closing let’s all hope this chaos in steel markets gets back to normal soon. If these shortages are hurting your business feel free to call me and I’ll see what we can do to help.
Author of The Real Business 101: Lessons From the Trenches
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