As we’re well aware, the past year has seen manufacturers’ price increases across the board, due in large part to factors driving up the costs of shipping. The coronavirus pandemic has had a profound impact on the global supply chain and the trickle-down is unlike anything in recent history. The fact of the matter is, we haven’t seen the worst of it. Players in all industries have been affected by these price increases driven by numerous increases in commodities, labor, and other expenses.
Supply Chain Issues Drive Up Costs
These consistent price increase trends are expected to continue well into 2021, and are certainly something to plan ahead for. In the past 90 days, we’ve seen notable price increases for copper, steel, lumber, rubber, and insulation. As of March, 17th, 2021, the price of copper was hovering at $4.12 per pound, up an incredible amount since this time last year which saw prices around $2.46 per pound. Scrap copper is in short supply, and as such, manufacturers are relying more heavily on the spot market with immediate delivery rather than futures market opportunities.
Word From Manufacturers
Many manufacturers are sending out formal letters informing buyers and partners of these continued price increases, which cannot be avoided due to many supply chain factors spinning out of control. Manufacturers have started to raise inventory to multiples above historical levels in order to buffer volatility and shortages, however, every industry has been and will continue to be affected, and we should plan and make adjustments accordingly.