subject: If You Buy Tray Cable Learn Why The Cost Of Copper Matters So Much [print this page] Many Businesses who have followed the markets lately will notice that commodity prices have been on a steady rise through the first half of the year. As vntc cable as well as tray cable, sow cable, soow cable, and dlo cable are all very much dependent on raw material costs, there has been a noticeable increase in the pricing of these items.
Many of our regular customers are acutely aware of the effects of rising commodity prices. The largest factor of course is the price of copper. Today for instance copper was selling for about $4.30 per pound at the COMEX. At this price point it is very close to its all time contract high of around $4.60 per pound hit earlier this year at the start of 2011. The question on everyone's mind is how much higher can it go.
A close second to copper in power cable production is the price of petrochemicals or oil. As the outer sheathing and insulating material of most cables are oil based, the price of oil plays a significant part in finished price also. Oil of course topped out at about $147 per barrel just 2 1/2 short years ago and is currently on the rise again with all of the tensions 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 these raw input costs. The majority of economists agree that we are seeing a slow but steady recovery that will continue throughout 2011 and into next year.
Quite a few emerging economies are also seeing better days with China of course being the biggest in terms of increased GDP. If we can continue with this current track it is almost assured that copper and oil will continue to appreciate in price. If you are a big buyer of the largest types of wire and cable it may behoove you to take a look at projected usage for later this year and possibly consider stocking up now before we begin to see the large price increases.
How can you capitalize on this knowledge? When you see prices decline on the NYMEX, ensure that your supplier is reducing the costs of their finished products to you. Many times, companies are quicker to raise prices than to lower them. Armed with the knowledge of raw goods costs, ensure that your supplier is pricing their wire and cable appropriately.
When you see there is a disparity between the cost of the raw materials and your finished product price, consider contacting another supplier for another bid. There are many distributors who sell tray cable and vntc cable. This extra effort on your part may help you retain more profit in your pocket. Additionally, knowledge of falling prices can allow you to reduce your bid prices, which might in turn make your bid more competitive than your peers and allow you to win more business.
by: ray san
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