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 “gossip”.
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 repricing”, 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.”
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
