There has been a 45% increase in the price per pound of copper in the last year – from $3.00 to $4.50 per pound – with a 15% increase in the last month alone. Nickel is following in coppers footsteps, up 40% in the last year. And many expect that copper could go as high as $5.00 per pound.
There is global upward pressure on all commodities, and as the blog Electrical Trends points out “Years ago the U.S. economy was a driver of copper demand. Unfortunately this has changed with the advent of China using in excess of 40-45% of worldwide copper demand.” Now add to that demand from the U.S. and a growing economy in Brazil the plain fact is that demand is outstripping supply. There are other factors impacting copper prices and the blog at Electrical Trends can tell you more. But in the electrical industry? Well rising copper prices affect each level of the supply chain a bit differently.
On their quotes, cable manufacturers state that prices are good for only 24 hours. Electrical product manufacturers like Remke look at their cable prices rising and have to decide whether to sell cable at their current stated price or the replacement price which will be higher. Electrical distributors are watching their payables increase and wondering what they should do about cable deliveries scheduled for a month or two out – where will the price be then?. And can the contractor pay the higher price? Last, but certainly not least, it is really tough on electrical contractors who had a lot of cable quoted in a job 2 months ago but when that job actually starts they are going to have to pay a higher price for that cable. What do they do then?
Hopefully what goes up will come down. But what if it doesn’t? What is your company doing, or planning to do, about the rising cost of copper?
What do you think about rising copper prices? We look forward to reading your comments – and thanks for stopping by EVERYTHING’S CONNECTED.
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