Copper & lubricating oil prices jump

While economists are busy revising their inflation forecasts upward, plant managers are already living under the strain of today's new inflationary environment.

07/01/2000


While economists are busy revising their inflation forecasts upward, plant managers are already living under the strain of today's new inflationary environment. For example, plant engineers now are shelling out considerably more for copper wire and copper tubing than a year ago. In the 12-mo period ending April 2000, prices in the copper rolling and drawing industry increased 5.1%. That's quite a reversal from the 12.8% price decline in copper rolled products during the 12-mo ending April 1999.

Another inflationary hot spot is lubricating oils and greases. Here, average industry prices jumped 2.2% in the 12-mo ending April 2000, up from a 0.3% price hike 12-mo prior.

Unfortunately, both the drawn and rolled copper and lubricating oils industries have a good case for their inclination to hike prices. Both industries have seen their margins suffer under the burden of escalating costs. Unalloyed copper prices, for instance, rose a whopping 30.5% between April 1999 and April 2000. And the cost of materials received from refineries by lube manufacturers soared 46.3% over the same period.

Price/cost/demand roundup

IndustrySICAverage Product Prices1Change, %, During 12-Mo Ending...Jan 00Apr 00Direct Mfg. CostsGradeGrowth in U.S. End Markets3Change, %, During 12-Mo Ending... Jan 00Apr 00


Wood pallets and skids


2448


0.01


-0.06


Stable


C


2.79


3.19


Polishes and sanitation goods


2842


1.12


1.30


Rising


B


2.87


3.26


Surface active agents


2843


-2.28


-1.88


Stable


F


1.16


1.52


Adhesives and sealants


2891


-0.02


-0.45


Stable


F


11.86


13.28


Lubricating oils and greases


2992


1.08


2.16


Falling


F


7.43


8.92


Rubber and plastics hose and belting


3052


0.12


-0.19


Rising


C


7.03


7.08


Abrasive products


3291


-1.18


-0.76


Rising


F-


10.39


12.18


Steel wire and related products


3315


-2.29


-2.05


Rising


C


4.99


5.24


Copper rolling and drawing


3351


-0.09


5.13


Rising


C


22.83


27.49


Nonferrous wire drawing and insulating


3357


-3.36


-0.17


Stable


B


26.52


30.12


Heating equipment, except electric


3433


1.45


1.34


Stable


B


4.04


3.92


Fabricated plate work, and boiler shops


3443


1.47


1.14


Stable


B


1.74


2.56


Bolts, nuts, rivets, and washers


3452


-0.45


-0.51


Stable


C


5.10


5.35


Industrial valves


3491


2.13


1.64


Stable


B


3.58


3.92


Fluid power valves and hose fittings


3492


1.92


1.90


Stable


B


3.58


3.92


Other valves and pipe fittings


3494


1.21


1.53


Stable


B


3.58


3.92


Miscellaneous fabricated wire products


3496


0.69


0.68


Rising


B


9.44


10.60


Fabricated pipe and fittings


3498


-2.52


-0.40


Stable


C


3.58


3.92


Ball and roller bearings


3562


0.85


0.80


Stable


B


4.34


5.62


1Average product price changes are calculated from the producer price index for each 4-digit SIC (standard industrial classification) industry from the U.S. Bureau of Labor Statistics.

the average producer in an industry. Grades of A to A+ mean plant engineers may be able to strike a better bargain with suppliers and better control plant costs.

3Growth in U.S. end markets data are from the ICE model and are estimates of output for the domestic end markets which purchase a given industry's products.

All data prepared and presented by Thinking Cap Solutions, Inc., Port Angeles, WA (telephone: 360-452-6159; e-mail: ebaatz@ice-alert.com).





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