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. 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.
|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|
|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|
|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: email@example.com).