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Stainless Steel Price Increase

Stainless Steel’s Surcharge fluctuations have come full circle from its lowest point in July at .32 cents back to January’s Surcharge at .62 cents. This means changes are occurring across the board in regards to supply and demand, and the price you will pay to get the material that your business needs. Understanding why will assist you in communicating and educating your team to assess where you may be able to make adjustments to weather the storm.

This increase derives from a few areas of economical and environmental growth plans that will inevitably affect your bottom line. A significant rise in demand for nickel is a major player in seeing these increases. As stainless steel’s corrosion resistant properties depend on nickel content between 8% and 16% percent, a rise in a base metal like this will certainly have repercussions.

As China consumes over 50% of the world’s Nickel, price increases will likely be implemented right at the base of production. Cuts to excess production of stainless steel as well as tightened exporting due to environmental regulations will continue to place a decline on volumes that are already at a significant level of demand. Thirty seven percent of nickel mines in the Philippines reported a “0” production value in H1 of this year. Additionally, several major nickel mines in Western Australia have addressed plans to stop or suspend productions all together. The ebb and flow of the restructuring of China’s production regulations will likely prove positive in the long run, however, short term pain does exist in the form of price per tonne fluctuations in the interim. This is a topic that could warrant a weekly review when anticipating your next stainless steel purchase.

As this drastic supply shortage and exponential demand continues to evolve, there is no clear indication on when the price increase will stop. For purchasers, be sure to keep following our updates on the nickel price. If in doubt, you can always speak to an Armour Alloys representative for insight on the matter.

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Aluminum Price Increase

The aluminum price increase in the past few months has given all purchasers a run for their money, literally. Just when you’ve developed a plan and have chosen a vendor that meets all of your location specific needs, your cost inflates and you need to reassess if there could be a better solution that directly affects your bottom line. Here at Armour Alloys we’d like to assist in shedding some light as to what factors are affecting the industry so you have a comprehensive understanding of what processes you may need to tweek in order to align your best practices with the demands of your role.

In general, there are many factors that affect commodity pricing. Aluminum’s price gained approximately 12% in the last 6 months making it metal’s second highest value gainer. A major factor in the increase is the Chinese supply side reform that includes a working plan to reduce air pollution, manage over production and filter through illegal or unqualified capacities. Through all facets of this restructuring, the global market could see an estimated 9.1 million tonnes per year reduction. Commodity pricing has risen with the anticipation of this estimated supply shortage and as a result there are introductory increases that could remain long term. As buying material is one of the most important processes in a successful manufacturing company, we have some suggestions on how you mitigate loss in potential surges of metal pricing.

1) Keep an eye on commodity price predictions from reputable sources. Purchasers are not the only professionals interested in commodity prices such as aluminum. Use all the information at your disposal to help you purchase at the right times.

2) Plan your purchasing schedule accordingly. Now that you have an idea as to where the aluminum price is heading, you can plan your buying schedule accordingly. If pricing is projected to decrease, buy only what you need to fit your production schedule. If there are projected increases in pricing, stock up and get the best value out of your purchases.

3) Always reassure your predictions. If you are unsure as to which way prices are going move in a given period of time, always seek to find the right information. At Armour Alloys, we have knowledgeable staff that will be able to assist you with your aluminum purchases. Ask about our stock and release program for both aluminum sheet and coil.

Please contact us for any of your aluminum or stainless needs.

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We Have Expanded Into New Offices!

Armour Alloys is pleased to announce that we have moved our offices into a larger location! Our new head office is now located at 250 Royal Oak Road, in Cambridge Ontario! This new facility is just minutes from the 401 and highway 8.

For any questions regarding the move, please call 519-279-1989 or email adam@armouralloys.com. We look forward to continually satisfying your stainless and aluminum needs.

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