If there were some sort of
benchmark that everyone could
look to for pricing, the metals
industry would be in a more
balanced state. Perhaps a cost-perton
average from a group of
suppliers across the world could
provide a yardstick that the
industry could follow.
Instead we have a system of
chaos where each distributor is
working from a different cost
structure in product and overhead
with pricing all over the map. We
find it hard to believe that the
market is changing so rapidly that
prices must be adjusted virtually on
a daily basis. Obviously customers
and vendors find this process
frustrating and hard to digest.
The bottom line is that the
supply chain has to accept the fact
that steel is a commodity where
price fluctuations exist. For that
reason it is impossible to establish
long-term prices because long-term
costs are unknown.
It is for all of these reasons that
users of steel should rethink their
supply chain, aligning themselves
with suppliers that can educate them
on pricing trends, and who can
speculate with inventory to meet
their requirements. What has
occurred this year with price
volatility should teach us all a lesson
for the future: To quote Bob Dylan,
"the times they are a-changing".
