How Tariffs Impact Spring Pricing
Greetings from Tennessee Spring & Metal
We’ve been getting a lot of questions about how tariffs and global market fluctuations may impact the price and availability of our springs. (See our recent Spring Market Update for more information.) While we don’t have a crystal ball, I have given our Magic 8 Ball a whirl and I can offer my “As I see it” insights into our purchasing model — and “most likely” make you feel a little better in the process.
“Outlook Good”
As a large custom and industrial spring manufacturer, we purchase much of our raw material directly from wire drawing mills — these are the facilities that “draw” the wire rod to the size and metallurgical needs of spring makers like Tennessee Spring & Metal.
Typically, we source high carbon or tempered wire for our springs, and many of the wire drawing mills we rely on are located right here in the United States.
The good news: That means we still have access to a ready, stable supply of high-quality drawn wire.
“Cannot Predict Now”
However, it’s worth noting that these wire drawing mills purchase their wire rod from a global marketplace of wire rod steel mills. These purpose-specific mills take the raw materials, process them, and extrude them into the “rod” that our wire drawing mills use to form the wire we use.
The wire rod steel mills that supply our American wire drawing mills are located all over the globe and have experienced considerable consolidation of ownership over the past decade; they now effectively dictate pricing.
The bad news: If wire rod mills are forced to purchase wire rod from countries that the US has imposed a tariff on, the material will be more expensive.
The good news: To contain costs, wire drawing mills will purchase their raw materials from suppliers located in other markets, not impacted by US tariffs. This offers a degree of insulation from the abject market chaos — and ultimately helps your humble spring manufacturer keep costs as low as possible.
“Reply Hazy, Try Again”
In the end, prices will rise and fall over time, but they will generally be significantly less volatile than what other markets must deal with.
That said, we are anticipating price increases with an immediate impact of 2.5% to 3%, with another wave anticipated in the 7% to 10% range by the end of April. These price increases may or may not be realized.
It has been our practice — and the practice of the industries we support — to accept the inevitability of these price fluctuations as part of the “without a doubt” nature of doing business.
What YOU Can Do:
To ensure we can continue to meet your needs efficiently, we kindly ask for your continued support and collaboration and:
As much advance notice as possible regarding your contract requirements.
Your best estimate of purchase commitments for as far in advance as feasible.
We understand these market fluctuations create challenges for your business. However, we remain committed to working proactively to minimize disruptions and control costs. Please feel free to reach out with any questions or to discuss how we can best support your needs during this time.
800-497-3545
info@tennesseespring.com