The owner of Perf.-Etc. Steel Corp. said he was hoping instead to bring steel manufacturers to Toronto's Sutton Place Hotel, the site of SPIDA's June 5 summer meeting, to explain why costs have risen more than 40 percent in recent months.
But every steel mill representative declined his invitation, saying they didn't want to defend their profits to a hostile group, leaving Tumberger to explain the situation. He said steel now represents 85 percent of his Illinois distribution company's business costs.
Steel prices have risen dramatically in recent months, affecting the construction industry and other sectors of the U.S. economy that use the material. Several HVAC equipment manufacturers, such as York International and Carrier corporations, have responded by raising prices.
Tumberger blamed the high steel prices on China's ongoing construction boom, a shortage of high-quality coke and the weak value of the U.S. dollar.
"It appears in the last 30 days that prices have leveled, but they have not," he said, adding that many manufacturers are buying extra steel now in anticipation of future increases.
Although the high prices are generating some much-needed revenue for the beleaguered, bankruptcy-riddled steel industry, Tumberger said not all steelmakers are benefiting from higher prices. While he called them a "huge windfall" for U.S. Steel Corp., other companies, such as Wheeling-Pittsburgh Steel Corp., do not produce enough steel for their own needs, so they are forced to purchase it from other suppliers, he said.
For those mills that have steel to sell, Tumberger said short supplies and high prices are forcing many of them to be pickier about whom they'll sell to and to limit order sizes. Many mills are choosing to stop shipping to customers who do not pay on time.
"They're clamping down on credit," he said, telling SPIDA members they should make sure their credit remains good with suppliers.
Tumberger said the likelihood of another summertime price spike was "pretty high" and that he expected the elevated prices to last into the fall, when price pressures should drop somewhat.
"I don't see this situation lasting past the third quarter, but I don't see it falling back that much. I don't see the mills giving it away," he said.