The Rising Cost of Tool Steel

Each month the winners of MoldMaking Technology magazine's Leadtime Leader Award Competition assemble in this regular column to discuss matters relevant to the industry. The award—designed to recognize outstanding U.S. moldmaking shops and their ability to succeed in today's global mold market—highlights a number of shops that showed outstanding performance in the following areas: leadtime, current and projected sales growth, innovation in the moldmaking process as well as innovation in the business side of moldmaking, technology, industry involvement and customer service.

This month, our Leadtime experts discuss any effects the recent increase in the cost of tool steel has had on their shops.

Jason Jepsen, Tech Centre manager, Eimo Americas (Vicksburg, MI)

To answer this question, I spoke with our shop supervisor. To be honest, we haven't seen any real significant increases in steel prices from our end as compared to a year ago. For us, steel is the most inexpensive component that goes into our jobs when compared to graphite, labor, custom components and hot manifolds. Of course, the more work we put into a piece of steel, the more valuable it becomes. Additionally, we don't typically build very large molds when compared to some of the other shops. Hence, we don't have to buy as much steel.

Rich Burman, president, Graphic Tool Corp. (Itasca, IL)

With regard to the steel prices, theÊmost weightÊin a tool is the mold base. The cost of the steel—holder block in particular—has increased more than 30 percent whereas tool steel has gone up more than 20 percent. If a tool costs $50,000, this translates into a 1 to 2 percent increase in our costs. Until now, we have not passed this on to our customers. In the future, though, we will probably have to at least keep this in mind when we are quoting, because prices are still on the rise.

Gene Bruce, co-owner, Summit Molds Inc. (Post Falls, ID)

When we quote a job, our quote usually stipulates in the terms and conditions that the price will be good for three months from date of quote. After that, it is subject to review. To this point, we have been okay with this approach. The rising cost of steel, as well as other components we must buy, is a major concern for us. We try to keep up as much as we can on these costs for our quoting purposes.