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Estimating Total Welding Costs

Keeping your welding costs low goes far beyond buying the lowest priced wire available. You must analyze how welding processes that increase deposition rate and increase productivity will reduce the largest component of welding costs – your labor and overhead. Here’s how to do it.

Posted: April 25, 2012

The labor and overhead portion of the actual cost of welding is generally between 60 percent to 70 percent of the total cost. So selecting an electrode that improves productivity (by increasing deposition rates) is far more important that selecting an electrode with a lower cost.

Table 1. Total Cost in $ Per Pound of Weld Metal At $50 Per Hour Labor Rate
Table 2. Minutes Needed to Deposit One Pound of Weld Metal
Table 3. Components of the Total Welding Cost at 60 Percent Operating Factor

Q: In order to keep welding costs as low as possible, shouldn’t I just select the lowest price wire available?

A: There are several factors that need to be considered when determining the overall cost of welding. Of course, the most obvious factor is the cost for the consumables (electrode and shielding gas or flux). The less obvious (and frequently overlooked) cost is the labor and overhead expenditure that can be allocated to the actual process of welding.

However, as will be shown in our example, the labor and overhead portion of the actual cost of welding is generally between 60 percent to 70 percent of the total cost. So selecting an electrode that improves productivity (by increasing deposition rates) is far more important that selecting an electrode with a lower cost. A process to determine the total costs of welding will be outlined below.

Using an arbitrary $50 labor and overhead rate and the “market list price” for a wide range of welding consumables, an estimation of the cost for one pound of deposited weld metal is listed in Table 1. Five different operating factors were used (the lowest being 20 percent and the highest 60 percent), where operating factor is defined as the percentage of a welder’s time that he is actually welding. For the GMAW, FCAW-G and MCAW processes, a rate of $0.20 per cubic foot was used for shielding gas costs.

In addition to labor, electrode, and shielding gas costs, the charge for the electricity needed to power the welding machines was incorporated into the total welding costs. Although in our example the cost of electricity per pound of weld metal never exceeded $0.40, this value is not insignificant and therefore was included in the calculations. On average, the cost for electricity was determined to be about 2 percent of the total welding costs when a $0.20 per kilowatt-hour rate was utilized. No “demand charge” pricing structures were used.

Complicating the selection of the most economical welding process (FCAW, GMAW, SMAW, etc.) and the right welding electrode (wire or stick) is the available equipment within the fabrication shop. If the highest output power sources presented to the welder happen to be 450 amp, 60 percent duty cycle machines, then the answer to electrode selection may not be as simple as “let’s use the largest wire diameter available to get the highest deposition rates.”

For example, in Table 1, the costs per pound for UltraCore 70C are shown and indicate that it is more economical to use 5/64 in diameter than it is to use 3/32 in diameter (at 60 percent operating factor the cost per pound of weld metal is $7.14, versus $8.67). This is because at 450 amps, the deposition rate for 5/64 in diameter UltraCore 70C is greater than that of the 3/32 in diameter, due to its higher current density. However, had we been able to fully exploit the full amperage range of the 3/32 in wire (with the maximum output amperage being around 700 amps), we would have seen the 3/32 in diameter wire provide a cost advantage.

So for our calculations, the welding current used was either the highest amperage value in the range provided for the electrode, or the maximum output for the welding machine (450 amps). From this amperage a deposition rate in pounds per hour is determined, and then the total welding time for one pound of deposited weld metal can be calculated. This time to deposit one pound of weld metal is listed in Table 2. At this point, the labor and overhead cost required to deposit that pound of weld metal can be determined by multiplying this time value by the stated labor and overhead rate of $50 per hour.

In addition to using a 450 amp multi-process power source for the potential “open arc” welding processes being considered, we also have an additional resource in the form of a 1000 amp AC/DC submerged arc welding power source. Although operating factors approaching 80 percent or more are possible with submerged arc welding, we will limit the operating factor at 60 percent for the basis of comparison to the open arc processes. However, we will make full use of the maximum 1000 amps available on the machine, as this aligns nicely with the maximum recommended current for 5/32 in submerged arc wire.

Based on the constraints that we have set, the components of the total welding costs (at an operating factor of 60 percent) have been separated out for the potential welding consumables under consideration in Table 3. For an E7018 stick electrode, the labor and overhead portion of the total welding cost comprises anywhere between 69 percent to 85 percent of the total welding cost. On the opposite end of the spectrum, the labor component makes up only 32 percent of the total welding cost for the submerged arc welding process at 1000 amps. And finally, for the wire-fed processes, the labor component of the total cost falls squarely between 60 percent and 70 percent.

It is interesting to note that in this example even though the costs for the submerged arc welding consumables are higher than those for the gas-shielded processes, the overall total cost for depositing one pound of weld metal is lower for submerged arc.

The message is that for the open arc processes, a 10 percent reduction in labor costs will be greater than a 10 percent reduction in consumable costs. Once again, using 3/32 in UltraCore 70C as an example, a 10 percent reduction in labor and overhead will result in a transfer of almost $0.60 per pound of deposited weld metal to the bottom line. On the other hand, a push for a 10 percent decrease in consumable cost will only save $0.25 per pound of deposited weld metal.

Ultimately, moving towards a higher deposition rate process will provide the biggest bang for the buck by reducing the amount of time spent welding. And as we know, time is money.

It should be reiterated that these calculated costs listed in the accompanying tables are based on a $50 per hour labor and overhead rate and market list price for the consumables. In the real welding world, very few customers pay list price, so in few cases will these be the actual dollar values of the welding costs in any given welding fabrication shop. However, the trends observed here will nevertheless hold true. Welding processes that increase deposition rate and increase productivity will reduce the largest component of welding costs – labor and overhead.

  • Richard Spillman wrote:

    Great article, we miss you in California.

  • Daniel Hernandez wrote:

    Excellent article Reg

  • José A. Peña wrote:

    Excellent article but we can´t read the very importan Tables 1, 2 and 3

    • Mike Riley wrote:

      Editor’s note: Unfortunately this is as large as we can make them.  Please increase the zoom size on your computer screen and that should work fine.

  • Sumit saini wrote:

    Very good article…i appreciate your work sir…good job

  • Jeremiah Long wrote:

    Hey how’s it going, I would like to see if you might be able to Send me an email of all three of your cost & overhead process TABLES please. I find this very interesting, but i can’t see or make out any of the charts from my cell phone. I would really appreciate it. Thank you Very much & have a great day.

    • Mike Riley wrote:

      Jeremiah, I just emailed you the tables you requested.

      • Rushi SHAH wrote:

        I am also unable to see the tables. Can you please share? Thanks in advance.

    • Tatang m wrote:

      Good article, I got a fabrication and erection piping job, I got a total inch diameter join, ….. can I calculate a simple budget, like the excel program? Can you help me whether the total dimensions of 5900000 ID inches, how many badges per ID?


  • Justin Triplett wrote:

    Jeremiah, what is the base unit for the costs listed in table 3? Per foot, pound, etc.?

  • Richard Echevarria wrote:

    Is the labor rate of $95 an hour for TIG welding out in the field too high?

  • Richard Echevarria wrote:

    I have a 48 inch diameter aluminum pipe that needs to be welded out in the field. Aside from preparation and fit up and consumables, how much time would it take to do a single pass in the TIG welding process alone? I did the math and it’s 150.72 inches in circumference. Any advice would be very helpful. Thank you.

    • Eric Guran wrote:

      Is the pipe joint open root? What alloy? What wall thickness? This would require AC GTAW process or wire-fed process, if you have around 14″ clearance around the outside diameter of the pipe, and if it is a heavy wall, consider an automatic welding system such as Tri Tool AdaptARC. Otherwise account for two welders hand welding the joint.

    • Fred Garcia wrote:

      Did you ever find out if the labor rate of $95 an hour too high?

  • Ed StJean wrote:

    Can you email me the three tables please?

    • Mike Riley wrote:

      Just emailed the three tables to you, Ed.

    • Tatang m wrote:

      Give me too.plss

  • Agrawal Chintan wrote:

    Sir! Great article!! Can any one provide the tables please. I cannot find it in the article. Thank you in advance

  • Joe Darcy wrote:

    Nice Summary. Would you please email the tables?

  • rob wrote:

    Can someone email me the tables to please, can’t see them.

    • Mike Riley wrote:

      Hi Rob. I just sent them over to you.

      • Parker wrote:

        Would some please send Tables 1-3? Thanks for the info!

  • James Woerner wrote:

    Please send the Tables 1-2-3. Good article.
    Thanks Jim

    • Mike Riley wrote:

      Just sent them over to you, Jim.

      • Hector wrote:

        Nice article, can you send me the tables please.

    • Ron wrote:

      Hey I can’t see your charts either. I was wondering if you could send them to me as well

    • Sneha Gaikwad wrote:

      Hello, I hope all is good with you. Can you please send the 3 referenced tables to me?

  • John Callaghan wrote:

    Hi Mike

    I too found this article quite interesting. If you could please send me over the tables that would be appreciated.

    Thanks in Advance


    • Mike Riley wrote:

      Hi John,

      Before I do that, try clicking on each table once, which should pull it into the display. Then click on the table again and it should show an exploded view of details. If that doesn’t work, let me know.



  • Gunalan wrote:

    Hey Mike, Very nice article. I would like to understand if you have a similar article for SEAM Welding process. Am pretty sure the costing method and variables are totally different — kindly support. Thanks in advance!

    • Mike Riley wrote:

      Lots of articles covering seam welding, but none to date that concentrate on process costing. Stay tuned.

      • mangesh joshi wrote:

        can u send me details of costing of plant piping above ground as well as underground ,operational as well as new project.
        impact of costing by increasing thickness of pipe.
        your guidance and support needed.
        excel calculator would be WOW foe me

  • Tom Patnaik wrote:

    I am trying to get a rough estimate of welding a foot length of 1″ thick cold-rolled steel plate, and compare that to welding a 1″ thick cold-rolled 316 SS plate. I realize there are different weld types as fillet weld and butt weld, and different welding methods/gases, etc. But without getting too technical/granular, what should I use as an approx. average $/linear foot of welding for ASME code pressure vessels?

  • Hector wrote:

    Can you send me the tables please.

    • Ron wrote:

      Hey I can’t see your charts either. I was wondering if you could send them to me as well

  • Dwi Priyo wrote:

    Kindly plese send tables 1,2, and 3.
    Thank you for kind attention.

  • Caleb Wright wrote:

    could you send me the 3 tables listed in this article please sir id really like to review them

  • raj wrote:

    what abtt otther consumables likes welding cable, welder glass,grinding wheel etc. Plz tell me consumables to be assumed per inch dia of welding a joint.

    • Billy Hargus wrote:

      Can someone please send me these tables as well?

      • Dwayne A Hash wrote:

        Would you be so kind as to email me the tables please and thank you.

  • Onimona Uyanwune wrote:

    Nice article, but can’s access any of the tables. Kindly send to me.

  • Peter Kulaba wrote:

    Could someone please get me the tables

    • Awoniyi Olakunle wrote:

      This is a great educational piece. Pls share the tables with me. Thanks

    • Matt wrote:

      Were you able to get the tables?

  • Andrew Curran wrote:

    Hi Mike – can I kindly request you to email the tables as well? Thank you.

  • GOPINATH wrote:

    How to calculate weld cost of SMAW and FCAW

  • mike melin wrote:

    can you email me these tables ?

  • Joe Maag wrote:

    Can you send me the three tables please?

  • Peter Wenninger wrote:

    Hi Daniel,
    Great article. Very important topic. I can’t see the tables. Please email me the tables.

  • Angel Padilla wrote:

    Great information. Will you please email me the tables? Thank you

  • Rushi SHAH wrote:

    Hi Mike,
    Nice and useful article. Can you please share the tables?

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