cost per kg - Jactio.com

What are typical prices for one kilogram of structural steel? What are the cost factors and what influence does the production location of a contract manufacturer have on the prices of welded steel structures and steel components? These questions are essential for purchasing managers of mechanical and plant engineering companies when building their supply chain. The answer to that is highly individual and depends on many different factors. We show you when low-cost country sourcing is worthwhile in order to benefit from location advantages and how to arrive at a meaningful price comparison for steel structures. What are the most important cost factors in steel construction? In simplified terms, producer prices for steel structures ex-works consist primarily of four cost factors: material costs (costs for raw materials such as plates, beams, steel profiles or pipes, as well as auxiliary materials such as welding electrodes or grinding wheels), labor costs (labor costs for cutting, welding, setup, preservation and assembly of the parts), administration costs and profit (building costs, quality assurance, sales, payroll, distribution costs, taxes, etc.), and external costs (galvanizing, powder coating, other surface or heat treatment). Furthermore, purchasing must also consider the internal expenses for on-site supplier support, as well as delivery costs, in order to arrive at a meaningful total cost comparison. Steel prices and material costs: Steel prices have been relatively constant and homogeneous in the past. However, this has changed since the outbreak of the Corona pandemic, and prices are extremely volatile. The uncertainty has increased even further since the start of the conflict in Ukraine. Since then, material procurement has played a crucial role. Suppliers with favorable sources of supply, e.g. Steel construction companies from Turkey have decisive location advantages. Transportation costs and material availability also have an influence here, so that manufacturing companies located near inexpensive steel producers or dealers have slight cost advantages. Rare material qualities or raw materials are often more expensive in smaller countries. In heavy steel construction with thick walls and few processing steps, material costs have a greater impact than in lightweight steel construction with thin sheets and more complex structures. The component weight plays a less significant role here and contributes less to the overall costs. The less standardized the semi-finished products used, such as sheets, profiles, or tubes, the more important the suppliers' sourcing becomes, even in lightweight steel construction. Here you will find a detailed article on current steel price trends. Currently (August 2023), the steel price on the London Metal Exchange (LME) in Europe is approximately... 700€ per ton (1.000 kg). Standard sheet metal, steel beams and profiles cost approximately [amount] when purchased in large quantities. €1,ooo per ton (1.000 kg). Small quantities in the steel trade and special material grades are correspondingly more expensive. There are also significant regional differences. The high volatility of steel prices is causing difficulties for many companies. They can protect themselves against market risks using price adjustment clauses or derivatives. Energy and auxiliary materials: Energy prices for industry in Europe vary by up to 100%. In contrast to steel production and processing, energy costs have only a minor impact on the manufacture of steel structures. Auxiliary materials such as technical gases or welding electrodes can be purchased at similar prices in all industrialized nations and have little effect on the final price of a steel structure. Wage costs. The situation is quite different when it comes to wage costs. Labor costs are the decisive cost factor in the production of steel components such as welded structures. Especially with complex steel components requiring many processing steps, labor costs contribute disproportionately to the final price. However, this statement only applies to components with many manual work steps. For orders with a high level of machine-based value creation, such as... In the mass production of stamped parts, cut-to-size pieces or CNC bending, labor costs become less important and other costs, especially transport costs, become more significant. According to Eurostat, the cost of an hour of work in industry in 2019 was €41,20 in Germany, but only €6,90 in Romania. The following table shows the other wage costs of some important industrial locations in the EU: Country €/h Germany 41,20 Austria 38,90 Italy 28,80 EU (28 countries) 28,20 Slovenia 19,20 Slovakia 13,10 Czech Republic 13,60 Croatia 10,50 Poland 10,50 Hungary 10,80 Romania 6,90 Bulgaria 5,70 These figures represent average wages in industry. Key workers such as certified welders are in high demand internationally and therefore significantly more expensive in low-wage countries. Switzerland is not listed in this table. According to [source/reference], wage costs in industry in 2012 were... According to the statistical dictionary of Switzerland, the figure is already over €50 per hour. For this reason, labor costs in Switzerland have an above-average impact on steel construction prices. Administrative costs and company profit. These costs include, in addition to company profit, expenses for buildings and machinery, as well as personnel that cannot be directly assigned to a specific order. When calculating in steel construction companies, all direct costs, primarily materials and working hours, are usually recorded and then multiplied by a factor for administration costs and company profits. External Costs Depending on the requirements, external costs may also influence the calculation. The most frequently cited cost here is the cost of galvanizing the steel structures. Most steel construction suppliers handle painting internally, but some deliberately outsource it. Unlike galvanizing, the cost of painting is heavily dependent on labor costs. While painting is significantly cheaper in low-wage countries, there are no significant differences between countries when it comes to galvanizing. External costs for stress-relief annealing are very common in welded structures. In addition to the actual costs for the external service, there are also the costs for transportation. Indirect costs are very difficult to track; these are costs that are not directly visible on the project invoice (hidden costs). These are particularly important for steel components. In contrast to purchased parts, there is a greater need for clarification regarding custom-made parts. The longer a customer works with a supplier, the easier the project management becomes. Furthermore, there are additional costs to consider, especially in steel construction: Transport costs. When importing from non-EU countries, customs clearance fees apply. No customs duties are levied on the import of steel structures from EUR1 countries, but the import must be declared to customs. Details on the import of steel structures from EUR1 countries can be found in this article. Internal costs for supplier management, quality assurance, and potentially costs for translating design documents, contracts, and acceptance protocols; travel and telecommunications costs; rework costs; costs for parts needed at short notice; costs due to delays (penalties, subsequent deliveries, etc.). How are costs distributed in steel construction? The distribution of these costs depends largely on the complexity and type of steel components as well as the manufacturing location. On average in the EU, depending on the type of steel components, one can expect a distribution of approximately... Expect 30% labor costs, 50% material costs, and 20% administration and other costs. Please note: This cost breakdown depends heavily on the specific products or services. depends on the type of steel structures. In simple, basic structures, the material cost share is higher and the personnel cost share is lower. For complex components manufactured individually, the proportion of labor costs is higher. In companies with a high degree of automation, labor costs also decrease in favor of other costs in the form of depreciation for machinery. The cost distribution also depends on the manufacturing location. In high-wage countries, the share of material costs is lower and the share of labor costs is higher. Example: Costs of an unpainted welded steel structure. For a medium-sized structural steel structure made from standard steel plates and beams (sheet thickness 5-10 mm, cutting, bending, welding), the following average costs per kg result in the EU: Material costs including waste and delivery costs: €1,50/kg; Labor costs: €0,90/kg; Administration and profit: €0,60/kg. This results in a total price of approximately... 3,00€ per kg of welded structural steel construction on average in the EU. Cost comparison by country of origin: If, instead of the EU average, the labor costs for other production locations are used as a benchmark, the following cost comparison for welded steel structures results: EU-28 Germany Poland Hungary Romania Labor costs per hour (€/h) 25,40 41,20 10,50 10,80 6,90 Material costs incl. Delivery and cutting costs €/kg 1,50 1,50 1,50 1,50 1,50 Labor costs €/kg 0,90 1,46 0,37 0,38 0,24 Administration costs €/kg 0,60 0,80 0,45 0,45 0,40 Total costs €/kg 3,00 3,76 2,32 2,33 2,14 If Poland is chosen as the production location instead of Germany, €1,44 can be saved per kg of steel structure. The manufacturing costs for steel structures from Poland are therefore approximately 40% cheaper than in Germany. Even greater savings would be possible in Romania. The Western Balkan countries and Turkey are also very favorable manufacturing locations. The combination of low material costs and low labor costs makes very attractive conditions possible here. These countries are closely linked to the European economy and are geographically close. The import of steel structures from the Western Balkan countries and Turkey is duty-free, but the import of the goods must be declared. The effort and costs involved are very low and are described in the article linked above. Cost per kilogram for steel construction in 2023. The costs for steel construction are often related to weight. Especially in steel construction for halls and buildings or in steel construction for plant engineering, prices are usually given by the kilogram. For larger projects, the buyer calculates a theoretical weight for each component at the time of ordering. Based on this, the steel construction supplier then prepares a quotation. After manufacturing, the structure is weighed and billed according to its actual weight. The cost per kg of steel construction is also frequently used for cost comparisons and framework agreements. However, in order for these to be comparable, the complexity of the steel construction, the surface coating and the quantity purchased must be very similar. Price examples for steel construction per kilogram 2022. The following prices are based on experience from the B2B sector and serve only as guidelines. Prices for project-specific steel components must always be determined individually. We would be happy to provide you with a free and non-binding quote for your steel construction project. Type of steel construction Price per kg Steel construction in €/kg, as of August 2023 Steel construction for buildings and halls made of profiles, painted, from 10t 2,00 - 4,00 Steel construction for buildings and halls made of profiles, galvanized, from 10t 2,30 - 4,50 Steel construction for work and maintenance platforms with railings and gratings 2,50 - 5,50 Machine frames without milling, painted 3,50 - 6,00 Machine frames with milling, painted from approx. 10t 3,50 - 10,00 Housing made of heavy plates, painted 3,00 - 6,00 When does low-cost country sourcing for steel components become worthwhile? Whether low-cost country sourcing of steel components is worthwhile for purchasing in a specific case cannot be assessed in general terms, but depends, among other things, on the following factors: The nature of the steel components. The more complex a component is, the more difficult it is to develop a supplier over a great distance. Since labor costs are the decisive factor, the ideal component involves a lot of manual labor. If the proportion of machinery is very large, fewer price advantages can be expected. In this case, price differences are more likely to arise due to subsidies or different financing of the production facilities. Contract duration and order volume: For one-off needs, it is comparatively complex to develop a new supplier. Unless the components are very simple or the individual projects are large, low-cost country sourcing is often too complicated in this case. For recurring orders and a corresponding purchase volume, the move abroad is worthwhile even for more complex orders. Prerequisites for successful low-cost country sourcing: In order for low-cost country sourcing to be successful, the groundwork must be laid internally within the company, and it must be clarified whether the company meets the necessary prerequisites. Does the company have the necessary resources and expertise to find and develop the right supplier? There are countless steel construction companies, but which one can truly meet the requirements? Finding the right steel construction supplier is often like looking for a needle in a haystack and often takes more time than expected. Many times, one waits in vain for offers. When you finally receive them, the price, delivery time, or availability often do not meet your original expectations. Many projects are unique, and the numerous steel construction suppliers also have individual strengths and weaknesses. 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Cost factors in steel construction – how much does a kg of steel construction cost in 2023?