18 March 2008
Cast Iron / Iron ore prices skyrocket
Posted by Frederic under: Industry Trends .
When a customer asked me for updated prices on the cast iron items, I got shocked about how much they have risen. Our manufacturer made me aware of this.
The price of the raw material, iron ore, rose more than 50% in 1 year time !
For sure I must have read this heading in an economy news paper a while ago, but probably never paid attention to it, classifying it as “gossipâ€.
Hard to believe, so I did some research on the internet and found interesting articles on :
http://www.bitsofnews.com/ , http://www.riotinto.com/ , http://seekingalpha.com/
Our manufacturer even suggested us to wait with orders, till things got stable again. Most customers stopped their orders.
How about the future? Seems to actual 65% rise is more than predicted, so one would expect prices to drop to reasonable values again. But, economists talk of “structural repricingâ€, like repricing of oil in 2003.
According to an article on www.worldsteel.org , “…expect prices to increase 20 per cent in 2008-09 and to be flat the year after.â€
What will you do?? Order less cast iron items?
Explaining to your customers this economic fact, should be enough to convince them of paying more. I believe people are prepared to pay more, and that the price of cast iron on the past was maybe too low.
HaoHao This
