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Steel prices shoot up

The manufacturing sector is about to be hit by a sudden hike in steel prices. It is speculated that the cost of steel will increase by about a third of its price. This type of inflation will affect every industry from automobile manufacturers to kitchen appliance makers that use steel as a major form of raw material. Manufacturers will be left with no choice but to pass on some (or most) of those increases in the cost of raw materials to retailers and resellers, and ultimately to end users.

Iron ore is the main component in steel and steel makes up for 90% of the world’s metal consumption. Shortage in iron ore, pricing wars between iron ore miners and Chinese steelmakers, who account for a large majority in steel consumption, and other related factors, has led to the upward trend in steel prices. In the end, steel-based products are only going to get more expensive. But first, the manufacturers are the frontline of defense in having to swallow the heavy cost of raw materials before passing some of those increases to resellers who will then have to pass it on the end user.

How does this affect Bluff, its partners and its resellers? Heavily. 40% of products manufactured by Bluff rely heavily on steel. Steel is a major raw material for Bluff. Like every other manufacturing company, Bluff is vulnerable to the market forces of supply and demand when it comes to raw material purchases, and will be impacted with these price hikes. Bluff will have to make adjustments to compensate for the rising raw materials costs. Bluff will do its share to keep the supply chain moving in a positive growth pattern. We will keep our prices competitive to reduce the impact on our resellers as much as possible.

We will all have to watch the market to monitor these rising commodity prices to help stem the tide of inflation. We will try to keep you posted through our blog.

Steel Prices Increase