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Why Buying Pallet Rack Shelving NOW Could Save You Considerable Money

Steel prices are going up. While the price of most goods is determined by supply and demand, recent mine closures and increased tariffs on steel imports are raising the price of steel in the Midwest and throughout the country. If you don’t follow the price of steel, maybe you should; getting your industrial pallet racks now could save you quite a bit of money down the line.


Weekly Fluctuations Can Be Dealt With

Prices of raw commodities are always fluctuating. Crops, textiles, plastics, and, of course, metals are in a constant price flux. Unless a person is in the industry or has their eyes on investments, they might not realize that the price of steel is constantly fluctuating just like everything else. And to the average consumer, it’s not a big deal. When their greatest purchase of steel is a vehicle every few years, the price of steel isn’t affecting their lives much.

But when the products are steel, as is the case of industrial shelving, changes in prices can make their way through the manufacturing process and bump prices. Normally the change in price is small, and small changes in the price of raw materials don’t tend to affect the price of finished products. In the case of industrial pallet racks, minor changes will simply be absorbed by the manufacturers; a dollar rise in CWT (hundredweight) will be offset by the dollar fall next week. Changing the prices of finished products just isn’t viable on a weekly basis, and in the end it tends to even out.


Constantly Rising Prices Are A Problem

The problem now is that the fluctuations that are occurring are only heading up. Just two and a half years ago the price of steel rolls was $18.50/CWT, an abnormally-low price that quickly corrected itself by mid-2016. Since the beginning of the year, the price of steel rolls has gone up nearly ten dollars, from $32.63/CWT to $41.78/CWT. This is the highest price since 2011, and is heading toward the insane prices that we saw in 2008. Such steep increases in steel prices aren’t something that manufacturers of industrial storage racking can ignore, and the price of the product goes up.


So Why The Increase?

There are two major reasons that the price is steel is going up, one global and one domestic.

First of all, the price of raw iron ore is going up, thanks largely to mine closures in India. When that cheap ore became less plentiful, India raised its prices, and this created a ripple effect through the industry. Every ore supplier, both those internationally those in our own country, have raised prices accordingly. In the end, ore prices are up drastically since January.

The domestic reason is the increase in tariffs on steel that took effect March 23, 2018. These higher tariffs on steel from China and Japan will reduce the amount of steel available to the United States, almost certainly causing prices to rise further.


Are The Price Increases Over?

Steel prices have seen some steep increases so far this year, and most data indicates that it’s going to keep going up for the foreseeable future. While steel from some countries is still exempt from the greater tariffs — South Korea, the EU, Mexico, and Canada, for example — it’s still a possibility that tariffs will be raised on these steel imports as well, which would further cause the price of steel to increase.

Our suppliers are offering some of the steel pallet rack shelving they already have on hand at “pre-price increase” prices, but we don’t expect that to last long. In fact, but the time you read this there might have been a price increase, but by acting now you can avoid that higher price that seems inevitable as the cost of steel rises.


Get Your Industrial Shelves and Storage Racking Now!

If you’ve been considering a pallet rack system, now is the time to take the plunge before steel prices go up any more. We’ll get your industrial shelving ordered, install them with our professional team, and make sure that you’re making the most of your space. All it takes is a quick message to our consultants. Click here to get the process started!



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