Why Does Steel Cost More Than Finished Parts

The big production shops purchase their raw materials by the truck load when they can as it saves them LOTS of money. When they purchase that much it gets drop shipped directly to the customer instead of going from the mill to the distributor first, which saves cost in both transportation and handling.

Purchasing 10,000 pounds at a time gets them a break too, but nothing like buying 50,000 pounds at a time.
 
Here ther's quite a bit of new stock if you're close enough. CR and TGP shaft $1/lb., HR$.40/lb.
 
I understand the huge volume buying discount, but it sure is harder to understand how they can buy the material, produce & package the product, ship it from China, truck it to wholesalers & then retailers across the country and then have a price lower than we can buy the material to make it.
 
Government subsidies, a giant Ponzi scheme. Trouble the chickens always come home to roost. What goes around always flies around.
 
Slave labor help the Chinese a lot.

There is no slave labor in China anymore. My first trip to China in 2005, I did go into a shop where was some 14 year old girls doing needlework on canvas. They were getting paid about 25 cents an hour to our standard, but fro them, that was privileged to make that kind of money. They only worked about 4 hours a day. Just like over here, they went to school during the day.

I've witness manufacturing over in China. People may only get paid a $1.00 per hour, to many that's a lot! Realistically, a real good machinist over there makes about $1.75- 2.75 an hour. Their standard of living is gradually catching up with the rest of the world.

The steel market is caught up with ours somewhat. The cost of steel of steel over there is about 25-35% less in price. Quality of their steel is equivalent to ours, but the selection of sizes varies and one size you get this time, you may not get the next time you want it. Since steel has become a global commodity today, they import just as much steel as they export, too. And this does not apply to them only. There are many steel mills located world wide that produce for global sourcing and a lot of it comes to USA, too.
 
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