Minimizing Cost Increase Due to Tariffs in a Volatile Metals Market

Posted by Brian Wood on March 13, 2018 | 0 Comments

Tariffs on AluminumCarbon Steel and Aluminum metals are major components of the manufacturing here at Austin Mohawk. It was recently announced that there will be tariffs on any steel and aluminum produced in foreign markets and imported to the United States. These tariffs have not been determined, however, are said to be on a per country basis. Initial talks of tariffs range from 24%-50% on Carbon Steel and 5%-10% on Aluminum.

Austin Mohawk sources the majority of steel and aluminum domestically. The new restrictions on imported steel will cause there to be less steel available in the market. Mills in the U.S will need to meet the increasing demand, requiring more manufacturing, which in turn will increase the mills cost. This increased cost will be passed on to the companies that are purchasing steel.

The Aluminum market has been fairly steady this year. In anticipation of the tariffs, most aluminum suppliers have increased prices by 5%. Pricing is expected to increase again in the very near future.

The Carbon Steel market has already seen several increases in just the first few months of 2018, directly affecting the items sourced by Austin Mohawk. However, with careful planning and working with a key group of steel suppliers, Austin Mohawk is able to stay competitive.
Not knowing what lasting effect the tariffs will have on the market, Austin Mohawk will continue to work with suppliers and use strategies to procure materials that minimize cost increases and material shortages. 

 

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