Article From: 1/20/2011 Production Machining, Miles Free, Director of Technology Services, PMPA
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Year-Over-Year Raw Material Price Comparison
Price Changes of Tracked Materials Over the Past Year
The materials we track are up year to year from 30% to 58%. So how do you quote firm pricing?
Despite tepid demand and mills nowhere near capacity, price increases are legion. CF steel bars up $2.00 cwt in September. Up $2.00 in January. Looking at a $3.00/cwt increase Feb. 1 on sizes larger than 3” rd. Welcome to the "Land of High Beta"- (risk or variability). Our prices are very low compared to global prices, and so we have become the tail being "wagged"
by the global dog of demand. I call it Beta (risk) because you have risk both ways--if you buy and then prices fall, or fail to buy and get shut out of production. We believe that this variability and the rapid swings are going to be a normal component of our marketplace in the short and medium terms. In an era where both holding or not holding inventory can be a punishing event, now more than ever it pays to know your suppliers.
Read the complete December 2010 Material Impacts Report (PDF format) here.
