Coil Cost

Costing and Quoting Coil-Processed Steel and Aluminum Parts

How cost per unit actually builds up on a coil line, from CWT base price to scrap credit and changeover, and the estimating errors that quietly erase margin.

Material is 60 to 80 percent of coil-processed part cost, so the base metal price dominates everything else. Steel prices quote in dollars per hundredweight (CWT) or per ton; at 48 dollars/CWT a 20,000 lb coil is 9,600 dollars before processing. Aluminum quotes per pound, often 1.35 to 1.60 dollars/lb for common 3000 and 5000 series, plus the Midwest premium. The Steel Coil Cost and Aluminum Extrusion Cost calculators convert CWT and per-pound pricing into cost per finished piece once you enter net yield, which is where most quoting mistakes hide.

Scrap is not waste on a quote, it is a credit you must book or you will overprice and lose the job. If a blanking line yields 60 percent and steel prime costs 48 dollars/CWT, the 40 percent skeleton has real resale value. Prime scrap steel might return 18 to 24 dollars/CWT and clean aluminum runoff 0.55 to 0.75 dollars/lb. The Scrap Metal Value calculator turns your skeleton and edge-trim weight into a dollar credit. On a 40 percent scrap rate, forgetting a 20 dollars/CWT credit inflates your net material cost by roughly 12 to 15 percent versus a competitor who books it.

Machine time is priced as a burdened hourly rate applied to real throughput, not nameplate speed. A cut-to-length line burdened at 165 dollars/hr producing 750 sheets/hr costs 0.22 dollars/sheet in line time. Drop to 24 in parts where the shear dwell caps you at 400 sheets/hr and that jumps to 0.41 dollars/sheet, nearly double, for the same steel. Estimators who apply an average sheets-per-hour across all part lengths misprice short runs badly. Pull real throughput from the Cut-To-Length Throughput calculator per part length before assigning a machine rate.

Changeover is a fixed cost you amortize across the run, and it punishes small orders. If a coil change plus shear setup burns 35 minutes at 165 dollars/hr, that is 96 dollars of labor and machine time, plus roughly 500 lb of threading scrap worth another 240 dollars at 48 dollars/CWT. Spread across a 20,000 piece run that is 1.7 cents/piece; spread across 800 pieces it is 42 cents/piece. The Coil Changeover Loss calculator quantifies the scrap side so you can set a minimum order quantity that keeps changeover under 5 percent of piece price.

Labor and overhead ride on top as a burden multiplier, typically 1.35 to 1.75 on direct labor for a coil shop. Direct operators might run 22 to 30 dollars/hr, but fully burdened with supervision, maintenance, facility, and crane time they cost 40 to 52 dollars/hr. A common error is loading overhead onto material dollars instead of processing hours; on a material-heavy part that double-counts the steel and blows the quote 8 to 12 percent high. Keep overhead tied to machine hours and direct labor hours, and let material pass through at cost plus a thin markup of 5 to 10 percent.

Gauge and yield assumptions are where defensible quotes quietly go negative. Quoting theoretical 0.048 in gauge when the mill ships 0.0495 in average means every fixed-length order eats 3 percent more steel than you billed; on a material cost of 6 dollars/piece that is 18 cents of unrecovered metal per unit. Likewise, quoting single-stage slitting yield of 97 percent while the real coil-to-part yield after blanking and changeover is 57 percent understates material need by 40 points. Always quote off net yield from Coil Yield and Slitting Yield, never off one stage.

Build the quote as a stack you can defend line by line: net material at CWT divided by yield, minus scrap credit, plus machine hours times burdened rate, plus amortized changeover, plus burdened labor, plus 5 to 10 percent material markup and a target margin. For that 5,000 blank job at 57.5 percent yield, material grosses about 1.04 dollars/blank, scrap credit returns 0.14, line time adds 0.30, changeover adds 0.09, and labor plus overhead adds 0.28, landing near 1.57 dollars/blank before margin. Show the customer the scrap credit line; it is the fastest way to win a price-sensitive bid without cutting real margin.

Published 2026-07-01.