Price development – additional price list for processed reinforcing steel

26.01.2022

Dear customers, dear business partners,

A year with many challenges lies behind us! A year with great challenges lies ahead of us!
Our bending operations at Sülzle Stahlpartner have had a difficult year. Exploding and above all ever-increasing steel prices have decisively shaped and negatively influenced the entire year.
Not only the old orders from 2020 with the extremely low sales prices have shaped the profitability, but also all orders which were booked in the rising phase are also no longer adequate due to constantly rising prices. The hoped-for price reduction to a previously normal market level has failed to materialize. Steel prices were also at a very high level at the end of the year.
Now another wave of costs is rolling towards us, visible and documented in inflation rates no longer thought possible. Every citizen is feeling this at first hand. Exploding energy prices are a particular cause for concern. Driven by these costs, this could lead to steel mills having to raise prices further in 2022. Some mills report that the cost of energy currently purchased on the spot market has increased six-fold. High scrap prices and increased prices for important aggregates are also driving up the cost side.
An easing or even relief for the bending companies is therefore very unlikely in 2022. On the contrary, current orders could also be affected by rising steel prices. Particularly as the EU’s isolationist policy (protective tariffs) also means that no significant third-country imports are possible.

But the company’s own costs are also rising disproportionately and resources in all areas are in short supply:

  • Logistics costs are being pushed up by energy prices, rising wages and non-existent drivers and transport capacity.
  • Skills shortages and high inflation lead to significantly higher labor costs.
  • The absences due to the Corona pandemic as a consequence of illness and, in some cases, the long covid
    should not be underestimated.
  • The higher electricity costs also play an important role in our production and will massively change the
    calculation approaches in the future.

Due to the listed points, which are only exemplary and not complete, we have to change our calculation approaches significantly.
As an orientation for you, as our customers and construction partners, you can apply the following rule of thumb:
There must be at least a difference of 200,-€/t between the purchase of the steel and the delivery of the finished reinforcement to the construction site in order to be able to work economically sustainable on the new cost basis. For medium and small projects, this approach is correspondingly higher.
We at Sülzle Stahlpartner strive for an effort-based remuneration and therefore work with our surcharge price list, which is attached to our offers and has the consequence that you only pay surcharges if they are incurred and are not reflected in a lump sum price.
In our newly revised price list we have now also listed the diameter-related surcharges for the dimensions 8, 10, 12 and 14 mm. These diameters are cost-effectively processed in modern bending plants with machines that use reinforcing steel from coil.
Manufacturers have always charged a higher dimensional surcharge for reinforcing steel in coils than for reinforcing steel bar. However, due to the scarce availability of coils, an increased basic price of approx. + 30,- to 50,- €/t compared to the basic price of bars has been established last year. This leads to a considerable price increase for the above mentioned diameters, which we therefore also have to adjust.
There is no reasonable alternative to coil processing, as the resource “qualified production staff” is scarce and will become even scarcer. The consequence can only be that automation will have to continue, which will trigger further investments.
In general, it remains to be said that our industry is undergoing a complete upheaval.

Uncertain supply chains, highly fluctuating and rising raw material prices, a shortage of skilled workers in all sectors, logistics and transport problems, import restrictions due to EU protection measures, skyrocketing energy prices and the transformation to a CO2-neutral society, are changing all previous approaches.

Also in the future we would like to find solutions together with you and will face all challenges. Especially in the area of long-running projects, we will need more flexible pricing from the client/owner, via the contractor, to the bending company. The fixed price commitments must be shortened in these projects in order to be able to provide the service together in a partnership-based distribution of risks and opportunities.
Enclosed you will find our new price list, which we will apply to new offers and orders.
I wish you a good and successful, but above all healthy year 2022, combined with the hope that we will be able to master the effects of the corona pandemic together.

Kindest regards from Rosenfeld

Heinrich Sülzle
Managing Partner

Price lists can be found here