Steel Pricing: What Can You Do?
March 31, 2004 From American Institute of Steel Construction, Inc.
It’s important for specialty steel contractors to focus not on the differences between current steel prices and last year’s prices, but instead to compare steel prices with those of competing systems, according to John Cross, Vice President of AISC Marketing LLC. Cross spoke as part of a program on Steel Pricing at the recent North American Steel Construction Conference (NASCC) in Long Beach, CA from March 24-26.
“I would like to suggest that each of us asks ourselves a question: What value do I as a professional in the structural steel marketplace bring to a project, even in these volatile times? Or maybe the better way to ask that question is, what value do I as a professional in the structural steel marketplace bring to a project, especially in these volatile times?”
Cross was one of several speakers at the conference who addressed the volatile steel-pricing situation. Currently, material surcharges on wide flange and rebar is at $120 per ton.
This year’s Steel Conference attracted an audience of slightly more than 2,000-primarily designers, fabricators, detailers, erectors, and professors. Attendance was down approximately 10% this year and conference management attributed the decline to the difficult economic times brought on by the unpredictable pricing environment.
Cross emphasized, however, that while steel prices are up, there is no shortage of material. In addition, he stressed that the material price increases will actually have only a minimal impact on the overall project cost. “It should be considered that increases in the mill price of steel have only a small impact on the overall cost of the project,” Cross explained. “On a typical project, the cost of the fabricated and erected steel frame represents 10% to 12% of the overall project cost. Of that steel frame package, mill material accounts for only 20% to 25% of the cost. This means that mill material accounts for only 2% to 3% of the project cost. A 40% increase in mill cost would equate to an increase of one percent in project cost.”
To read Cross’ full comments, visit www.aisc.org/PricingComments.
For more information contact:
VP of Communications
American Institute of Steel Construction
The American Institute of Steel Construction, headquartered in Chicago, is a not-for-profit technical institute and trade association established in 1921 to serve the structural steel design community and construction industry. AISC’s mission is to make structural steel the material of choice by being the leader in structural steel-related technical and market-building activities, including: specification and code development, research, education, technical assistance, quality certification, standardization, and market development. AISC has a long tradition of service to the steel construction industry of providing timely and reliable information.
130 East Randolph St. Suite 2000
Chicago IL 60601
Fax: 312.626.2402 www.aisc.org