The Trump EffectJuly 5, 2017 - Author: Jamiel Fletcher
Since my last blog had a lot of information, I want to break it down and really talk more about the effect that this possible act is going to have on Palatine Welding. Now as I said before, this new act will most likely cause a shortage in the steel industry. But what exactly does that mean for us and other companies similar to us? For the past 5 years or so, the price of steel has been predominantly dropping, which is great for companies like us and our customers.
However, Trumps new order may change the price of steel drastically due to the shortage that will most likely happen immediately after the order is passed. Now not only would this act affect the prices of our steel, but it also threatens our ability to make estimates for sales over long periods of time. For example, if a customer were to ask us to make an estimate for a job every month for a year, and to keep that price the same, that would be very difficult. This is because we are not sure if prices will be rising soon. If we make an estimate that our steel will cost a certain amount each month, and then a month later the steel prices increase due to Trump’s order being passed, that would be a problem for us. This idea Trump has is making it very hard to be certain about the estimates that we are making for each job. However, this is not all bad news for our company. In the long run, the prices of steel will most likely go way down due to the fact that we will not have to get the steel from oversees anymore. This will make our estimates better and cheaper for our customers who are trying to do business with us. However, we have to be prepared for the immediate shortage in case this actually does go through. It would not be probable to turn a blind eye and hope that the act doesn’t pass. We have to keep in mind that the act might actually pass, and make our estimates to the best of our abilities based on what is going on in the steel industry, and what will be going on in the future.
Comments are closed - Categories: Uncategorized