18-06-18 Raw material dynamics
Mold makers at an American international trade show said tariffs on steel and aluminum are raising prices for their key raw materials, and they will fuel higher prices for molds. But by how much depends on the size and complexity of the tool.
The US President imposed tariffs of 25 percent for steel and 10 percent for aluminum imported into the United States starting June 1, less than two weeks before this trade show, which ran June 13-14 in Novi. Toolmakers said U.S.-made steel and aluminium prices will also go up.
Some mold makers said steel suppliers immediately slapped them with 25 percent higher costs. Other exhibitors said they had seen smaller increases, and a few said they still have not seen any price hikes. But they all agreed that the tariffs will increase prices for molds.
"At the end of the day, those prices get passed on to the customer," said a chief financial officer, Mich.
Steel accounts for a significant percent of the cost of manufacturing an injection mold;
"With all the steel coming into this country from Europe — the cost of steel just went up," a Mold Group president.
Normally, the price of steel is fairly stable. But the tariffs are changing that.
Mold makers generally order steel and aluminum for each specific mold job, so they can't cushion material price hikes by stockpiling steel. But as job-shop operations, they can react quickly to list higher material costs on contracts. Several mold makers at this exhibition, said they now are including a line item in job quotes saying that material prices are subject to change, based on higher costs from the tariffs.
American mold makers have been busy, thanks to the strong U.S. economy and solid sales of cars and trucks.
Toolmakers said that they can't absorb major price increases for steel and aluminum.
"Will we have to increase pricing? Absolutely. We will," a CEO said. "If our pricing goes up from our material vendors, we are going to have to quote higher mold prices. For sure."
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Source PN
