Connecting with Contractors is more than a philosophy; it represents the core values we’ve used to run our business for more than 25 years. Accu-Tech’s dedication to our customers extends far beyond the sale. We’re committed to being your source for, not only superior products and service, but the latest industry trends, training, and news. Our industry is one of constant change; networks are being pushed to speeds once thought impossible, innovative products are being developed like never before and a focus on ‘green’ building design is at the front everyone’s mind. Change is part of doing business in our industry. Another change is on the horizon-- our market has experienced substantial increases in the cost of raw materials: copper, PVC, and FEP. Below is a brief report designed to help our customers understand the causes behind some of the upcoming prices changes. Accu-Tech is committed to making this transition as simple as possible. If you have any questions, please contact your Accu-Tech sales representative.
Direct From the Industry Over the last 6 months, the market has experienced significant increases in raw material prices. This has hit the data cable market particularly hard, with copper, fluoropolymers, and polyolefins all experiencing significant increases in cost. Chip Barrett Product Manager- Premise General Cable
Over the past year we have not seen any significant price changes in copper cabling. The economic downturn put a tremendous amount of downward pressure on all of our manufacturers to keep prices static or even in some cases lower pricing based on competitive feedback. In the meantime, raw materials and copper costs began to rise.
Bill Geary President Accu-Tech
Copper Copper, a significant cost component in LAN cabling, reached an all-time high of $3.94 per pound in April of 2008 and less than a year later, declined to $1.47 per pound in January of 2009. Since this time, copper costs have been rising steadily-- up 20% just in the last quarter. We can expect copper prices to continue to rise. Experts believe copper has more room to run in Q4 of this year and into next, pushing through itâ€™s all-time high to reach prices of $4.00 per pound and above. We want to keep our customers and partners informed. Daily copper charts are posted on our website so you can track changes in the market as they occur and we will continue to work with our vendor partners to ensure our customers are the first to know of changes in the industry.
FEP FEP, a fluoropolymer used in the production of communications cable, is on an unprecedented rise. Changes in market dynamics resulted in a major reduction in capacity; we went from 4 FEP manufacturers down to 3. Compounding the problem is a reduction in global mining of fluorspar, a component of producing FEP. Additionally, a growing demand for FEP in other industries including electronics, military, oil and gas is putting a strain on an already limited supply. FEP prices have increased 25% over the last 12 months.
PVC Oil is a key component in the production of Polyvinyl Chloride (PVC). PVC has jumped more than 10% since the start of 2009, following a similar rise in the cost of oil. While this is a key factor, the main cause of this increase is a weakening caustic soda market. As caustic soda prices collapse, PVC plants are beginning to close, resulting in a limited supply. As demand increases and supply decreases, prices tend to rise The Takeaway: As PVC prices increase, this will be reflected in the cost of CM and CMR products, which use this material in their insulation and jackets.
Shipping and Transportation The one factor we have all felt is the rising cost of gas. With increases in fuel prices, it is much more expensive to transport material and shipping companies are raising their prices. This increase is compounded in our industry as oil is used in the manufacturing of products as well as to transport materials to the job site.