Valves report: September 2018
Material cost and exchange rates are holding and pricing from the typical inflationary factors are a non-issue. The pricing put into the marketplace thus far this year is covering that side of the cost to produce.
No surprise is the continuation of the wait-and-see impact to any tariff increases beyond the current structure. Check valves have been impacted thus far and most have put through supplemental increases to cover that additional cost. The third round of tariff discussions in Washington will cover almost all the industry’s valve types. Depending on amount of tariff increases, the countries it is imposed against will have to lead to a wave of increases from many producers. In the meantime one can expect shorter protection periods on jobs and contracts to be certain the increases from tariffs can be recovered. The lead times continue to stretch into 2019 for forged and cast product as well as high-performance.
Residential /Commercial Valves
- Commodity metal costs were trending down last month. Copper averaged $2.69/ lb. in August, down 3.6% from July.
By far, the most concerning issue that would affect valve pricing continues to be the third round of proposed tariffs affecting $200B worth of Chinese products. If implemented, an additional 10% to 25% customs duty could be applied to a wide range of common (plumbing, HVAC and industrial) valve types and components. These increased costs would likely be passed on to customers. The period for public hearings / rebuttals is now closed and a decision is expected in September 2018. If enacted, these new tariffs could be applied to goods arriving at U.S. ports as early as October 2018.
The American Supply Association (ASA) and its Industrial Piping Division (IPD) is the national organization serving wholesaler-distributors and their suppliers in the industrial and mechanical pipe-valve-fitting industry. As a powerful alliance of channel partners, we provide a forum for your upstream trading partners to exchange critical information and address key issues.
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