Material Costs will force Price Increases Soon

By: Mike Ratican, Business Director

While most customers aren't surprised by annual price increases to adjust for increasing costs of production, the next round of price increases may leave some customers with a serious case of "sticker shock".

They won't be alone. Manufacturers ordering new stock for the holidays may be shocked as well.

The most recent updates in pricing to manufacturers from material sources in the U. S., Asia, and Europe, included huge price hikes in finish metals, especially brass, with typical increases of 40 - 60%.

The cost of base metals needed to produce brass has skyrocketed in recent months. Copper, for example, has more than doubled in price in the past year. According to industry analysts, the chief cause is demand, mainly from China, and India, 2 leading producers of brass for many applications.

It's a bit ironic that many U.S. manufacturers have turned to China, India, and other international sources to obtain less expensive brass - only to be charged more due to the increase in demand placed on these sources by the U. S. market.

In recent years many manufacturers have reduced the amount of stock on the shelves through the Summer months, choosing to restock in late Summer for the holidays. This "short stock" condition may make the situation more immediate, as prices for holiday restock will likely be subject to these increased prices.

Many smaller recent increases have been absorbed, mainly by retailers, to maintain competitive pricing. Unfortunately, with increases of this magnitude, retailers will be forced to pass these increases on in the form of higher prices to customers.

Our advise to shoppers is to buy now - and avoid what will likely be a more expensive "Christmas Rush".

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a Division of Windward Instruments