Cable Aes
How To Shop for Tray Cable And Why Copper Pricing Affects The Final Price You Pay
Many Businesses who have followed the markets lately will notice that commodity costs have been increasing steadily through the first part of this year. As vntc cable as well as tray cable, type g, soow cable, and dlo cable are all heavily dependent on raw input prices, there has been quite a large increase in the pricing of these items.
Most of our regular customers are understandably aware of the effects of increasing raw material costs. Most important of course is the cost of copper. Today for instance copper was selling for about $4.30 per pound at the COMEX. At this level it is just off its all time closing high of around $4.60 lb hit just a few weeks ago at the start of 2011. The question on everyone's mind is how much higher can it go.
Closely following copper in electronic cable manufacturing is the cost of oil. As the jacket and conductor insulation of most cables are oil based, the cost of oil plays a big role in pricing also. Oil we know topped out at about $147 per barrel just 2 1/2 short years ago and is currently on the rise again primarily due to problems in the Middle East and North Africa. Oil is currently going for about $104 per barrel.
Assuming the economy keeps improving, it is very likely that we will experience a sustained increase in material input prices. Many economists agree that we will continue to see a measured but steady recovery that will go on for the rest of 2011 and into next year.
Quite a few emerging economies are also experiencing improvements with China of course being the 800 pound gorilla in terms of increased GDP. If we can continue with this current track it is reasonable to believe that copper and oil will continue to appreciate in price. If you are a big buyer of the larger types of wire and cable it may be in your best interest to take a look at projected usage for the rest of this year and maybe think about stocking up now before we begin to see the large cost increases.
How can you capitalize on this knowledge? When you see costs go down on the NYMEX, ensure that the company you are buying from is reducing the prices of their finished items to you. Often, companies are more apt to increase prices than to reduce them. Armed with the knowledge of raw goods costs, make sure that your supplier is passing some of the savings along to you where appropriate.
When you see there is a disparity between the cost of the raw commodities and your finished product price, think about reaching out to another supplier for another bid. There are many distributors who sell tray cable and vntc cable. This extra effort on your part could help you retain more profit in your pocket. Additionally, knowledge of cost reductions can allow you to trim your job quotes, which may make your bid a bit better than your peers – and allow you to win more business.
If you have any questions or are in need of more detailed advice, please call us. Delco Wire has been in the wire and cable business for over 30 years. Our very experienced staff will be more than happy to help in any way possible. We can be reached toll free at 800-714-9473.
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