ImageFirst News

Monday, September 24, 2018

Metal Makes The World Go Around

How Metal Pricing Impacts Signs

Author: Mike McKeag

Whether you agree or dis­agree with the 232 tar­iff it is here and it affects Image­First™ and our customers.

Quick Overview:

This is an exec­u­tive order” based on the Trade Expan­sion Act of 1962
The Sen­ate RPC out­lines 3 Main Take­aways that you can read here.

Why this is so unique: 

No one has ever worked under a tar­iff in this indus­try before so there are many unknowns. This tar­iff could go away as quick­ly as it came into being. A change of opin­ion in the exec­u­tive branch could remove or change this exec­u­tive order. This could make it hard for met­al pro­duc­ing com­pa­nies to ful­ly invest in increas­ing pro­duc­tion, infra­struc­ture or chang­ing busi­ness practices.

The effect on busi­ness: 

The 10% tar­iff on alu­minum alloy has increased the cost of alu­minum per pound for val­ue-added com­pa­nies. In July 2017, com­mon alloy alu­minum (this is what we use) was $1.70/lb. Today it is right around $2.60/lb. This means, every­thing alu­minum (angle, plate, sheet, flat bar) is more than 35% the cost of what it was a year ago, which increas­es the price of com­mon­ly-used raw materials. 

Dave Watts, of Image­First™ com­ment­ed that 

this all equates to a fair­ly unsta­ble mar­ket, where our sup­pli­ers guar­an­tee pric­ing for per­haps 24 hours, not weeks or days. This lim­its our abil­i­ty to keep quotes valid for too long.”

The good news, accord­ing to Pat Richards with Phoenix Met­als, is

the mar­ket is as sta­ble today as it has been in the past 9 months.  Our mill sources lead us to believe there is a sup­ply and that is good news.” 

What this means to IF customers:

1. Quotes will only be valid for a max­i­mum of 30 days, and some­times short­er depend­ing on raw mate­r­i­al needs & circumstances.

2. There may be slight price increas­es because our cost of goods has increased significantly.

Click here for the full US Dept of Com­merce Study on The Effect of Imports of Alu­minum on Nation­al Security”

Have more ques­tions? Email us your question.