Material Impacts on the Precision Machining Industry - April 2010
Prices of raw materials used to make precision machined products are up substantially, from 44% to 114% from March 2009 - March 2010 for 6 of the 7 materials we track. Low inventories, increasing demand and idled production facilities are among the factors involved here in North America, as are the historic iron ore agreement and continued high demand in China. Fuel price increases also impact freight, which is an important factor in our business. We will not be shocked to see monies paid for steel in May to be $80 per ton higher than they were in April based on already announced price increases and the current price on busheling.
The prices of 6 of the 7 raw materials that we track rose as follows this calendar year:
Aluminum: Up 65% from March 2009
Brass: Up 76% from March 2009
Copper: Up 87% from March 2009
Nickel: Up 71% from March 2009
Stainless: up 44% from March 2009
Steel, Busheling: Up 114% from March 2009
China Coke: Down 8% from March 2009
They may not call it inflation - YET, but 6 of 7 crucial raw materials we track are up ranging
from 44% to 114%. In addition to the fundamentals in our local markets, there are global
issues that add more risk and thus price variability to our industry’s raw materials.
We expect to see freight prices climb as fuel prices escalate this summer, and urge all
companies to watch pricing developments closely. See PMPA's blog for details of the
manufacturing V-shaped recovery.