As most Americans are well aware, rising inflation rates have affected the price of virtually everything on the market. Unfortunately for metal stamping companies in Minnesota and across the U.S., this same inflationary pressure has increased the cost of secondary operations such as heat treating, plating and painting.
However, global steel prices are substantially down from their pandemic highs – which were largely due to sudden supply chain constraints rather than ongoing inflation. So raw materials cost less but labor and post-production are costing more, ultimately balancing out the total price of many metal stamping projects and other contract manufacturing services.
Raw Material Pricing Has Mostly Returned to Normal
Raw material pricing, including the cost of steel, spiked substantially during the COVID-19 pandemic. In May of 2021, we reported on our blog that prices were climbing past the $1,300/ton mark, after starting the year at an already-high $1,000/ton. Many analysts were predicting a price reset on the horizon, but the war in Ukraine shook up supply chains again, which saw global steel prices reach nearly $1,500/ton by April of 2022.
Thankfully for metal stamping service providers throughout the nation, raw material price relief was finally realized throughout the latter half of the year. The cost of raw steel has settled back to roughly $650/ton, which is in the vicinity of pre-pandemic prices.
The Cost of Labor Has Increased
Despite raw material prices settling down, the overall cost of custom metal stamping services hasn’t dropped substantially. This is largely due to the increased cost of labor that is being experienced across most industries.
Rising inflation means that employees need more money to make ends meet, and this effect has only been exacerbated by the already-tight labor market. To put it simply – skilled workers in manufacturing are getting harder to find, rising the tide of wages.
Price Increases for Secondary Operations and Post-Production Services
Some custom metal stamping projects require secondary operations such as heat treating, electroplating, powder coating, etc. The price of virtually all post-production services has gone up substantially because of increased labor costs as well as the increased cost of specialized machinery, energy, and freight. That means that even if we’re able to save your project money at the metal stamping stage due to lower steel prices, your overall project cost may not go down.
Keeping the Costs of Your Custom Metal Stamping Project in Check
Despite the rising costs of labor and secondary post-production services, Rotation Engineering and Manufacturing continues to offer cost-effective metal stamping services by leveraging our extensive vendor network and purchasing power wherever possible.