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Just look at the charts!
The prices of the raw materials that we track rose as follows this calendar
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 increases as rate of growth in demand continues to outstrip the low inventory levels at suppliers. We believe that surcharges have become a permanent feature in the market for raw materials used in our industry. Shops offering fixed prices for their products do so at their own peril. We hear of “April” lead times being quoted for some steel items. The backlogs we hear about in steel lead us to believe that some tacit ‘allocation’ might be occurring.
The Institute of Supply Management reports economic activity in the manufacturing sector expanded in December for the fifth consecutive month, and the overall economy grew for the eighth consecutive month. Right on its heels due to low inventories--price increases for raw materials!
Read the complete December 2009 Material Impacts Report (PDF format) here.
