Why Does Steel Cost More Than Finished Parts

Because you buy your steel in the wrong places.

Look for steel and aluminum recyclers within a range of miles you are willing to drive. Steel at my local recycling yard is 45 cents/lb and across the street aluminum is $1.25/lb. Many of the local machine shops sell their drops to the recyclers who in turn mark it up for sale to everyone else. The steel yard also stocks and sells new steel in sheets, angle iron, and strips at full market rate. Either way, shipping metals is expensive and somebody is going to pay for it.
 
In my opinion and around me steel is the cheapest material, I'll write couple of prices so you can compare, Prices new: Hot roll steel is around 0.8 - 1 euro/ kg, high carbon steel C45 is 1.3 - 2 euro Kg, tubing 0.6 - 1 euro/ kg, aluminium 3 - 5 euro/ kg, Plastic (teflon, nalon) 10 -25 euros/ kg.
For example hot roll 10mm round 1 meter long is 0.5 euro, 20mm round 1 meter long is 2 euro, C45 10mm round 1 meter long is 1.5 euros, 20mm round 1 meter long is close to 5 euros.
On the other hand there is scrap yard prices, from 0,22 euro/ kg to 0,5 euro/kg for steel and around 2 euros/ kg for aluminium, good pieces tend to be on the higher price.
 
A good friend of mine owns a metal recycling business. He has nothing usable by us in the recycle side, and only stocks a bit of hot rolled bar and angle on the new side. Here, being a port city, the scrap goes straight to the docks and is loaded on to ships heading to Turkey.

Also, being a port city, if you don't have a shipyard PO backing you, the pricing make Metals Online a real bargain.
 
Because in China they don't spend money with OHSAS, marketing, fancy offices, CEO fast cars, government taxes, development, employee bonus, insurance...
 
Because in China they don't spend money with OHSAS, marketing, fancy offices, CEO fast cars, government taxes, development, employee bonus, insurance...
Not totally true.
They have nice offices. CEO has fast cars, most managers of the larger companies drive nice cars, too. Government taxes in China are less than they are here in USA. Businesses over there pay 25% where we pay around 35% in taxes thereabouts. Larger companies do have employee bonuses and insurance, too. China has come a long ways from what it was 20 years ago. They have the rest of the world to thank for that, especially the Corporate giants of USA. China does have a OHSA similar to USA but not as harsh as it is here in USA. How about Brasil? Wasn't too bad down there 38 years ago when I visited there.
 
Brasil growed untill 2014 then started to fall and now economy isn't going well...
We need to get rid of corruption and modernize our tributary and labour legislation.
Today we pay around 45% in taxes.

And you right about China. Have seen some cheap manufacrures migrating to India
 
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.

Your probably comparing the price of american made steel to the finished product made in china from chinese steel. That equation will never work. And the bought finished product will never be as good as the one you make.

If your looking for really good quality steel go to you local auto workshop and scrounge old drive shafts, surprising what you can make out of an old shaft, a brake disc, clutch plate etc., and other parts. especially cars made in Germany, Japan, USA and some others beware Korean and other asian. Also large truck workshops for larger size shafts. Even heavy earthmoving or mining equipment shops. Also try scrounging large RSJ and plate off cuts from structural engineering shops, that steel is always made to a spec.

Happy hunting.

Bob
 
Last edited by a moderator:
Multi factorial. Clearly all of the above arguments are at least partially true, adding up to a large cost difference.
Robert
 
Your probably comparing the price of american made steel to the finished product made in china from chinese steel. That equation will never work. And the bought finished product will never be as good as the one you make.

If your looking for really good quality steel go to you local auto workshop and scrounge old drive shafts, surprising what you can make out of an old shaft, a brake disc, clutch plate etc., and other parts. especially cars made in Germany, Japan, USA and some others beware Korean and other asian. Also large truck workshops for larger size shafts. Even heavy earthmoving or mining equipment shops. Also try scrounging large RSJ and plate off cuts from structural engineering shops, that steel is always made to a spec.

Happy hunting.

Bob
Sometimes the shops will let you have the offcuts before they go to the scrap yards, that way usually for free, or sling the guy a few beers, I gave one guy a slab and he's given me unrestricted access to his scrap bins, I've picked up some very nice pieces of high quality steel, now all I've got to do is find the time to start making stuff. works for me.
 
Actually it does not, and cannot unless the product is set up as a loss-leader to draw a company into a market position. Any company cannot exist without a profit margin or serious subsidies, so selling a product at below cost is not sustainable, and the company will die a proper death. The comparison you are attempting to make is out of balance. The effect you observe from selling low cost product does have a negative effect on markets that cannot or choose not to compete on those terms, and in the long term is not healthy business, IMO. It is happening every day, but is slowly changing. It's a complicated problem that sounds simple.
 
Back
Top