The prices of raw materials that we track rose substantially this year!
- Aluminum up 44% from Dec 2008.
- Copper up 112% from Dec 2008
- Nickel up 27% from Dec 2008
- Steel busheling up 35% from Dec 2008
- China coke up 60% from Dec 2008
We expect to see continued incidents of shortages, material unavailability, and skyrocketing surcharges and price increases until the supply lines are filled.
Here is link to PMPA’s Material Impacts Report for year end 2009.
Last year taught us 2 economics lessons:
- It doesn’t matter how many parts your machines can supply. Orders are based on DEMAND.
- Prices for raw materials inevitably go up when there is no SUPPLY available.
Remember those the next time your customer tells you they want a fixed price or a mandatory discount.
For more on Supply and Demand:
- Well, maybe the demand we’re talking about is a wee bit different…
