There’s been plenty of exposure on the news about the falling oil prices, but I thought I’d have a quick look at the London Metal Exchange at the recent position of many of the raw materials we use in the PVCu window manufacturing industry.
And, I was pleasantly surprised to see the extent of many of the price falls. I took screengrabs of the graphs showing the last two years:
Zinc
Nickel
Aluminium
Lead
Steel
(I’m not sure why, but I couldn’t get data for two years, but the following graph shows dramatic falls in the price of steel over recent months).
Dramatic falls!
With oil now trading at a 15 month low, and PVC polymer prices having fallen over recent months, this has to be great news for the double glazing industry as a whole.
I must admit I haven’t had systems companies and hardware suppliers knocking on my door so far offering to reduce their prices! But these raw material price falls have to filter through the supply chain so that fabricators and installers also benefit.
As for glass prices and the energy surcharge … I’ll save that post for another day:-)
Tags: Glass Cartel, Window Hardware
Very good point made. My business partner and i was only discussing this yesterday, we have been keeping an eye on all the markets for the last 6 months and feel a little “peeved” at the mo.
Significant falls indeed. There is also evidence of a massive reduction in world wide shipping costs.
PVC resin must surely also be due for a major correction. Anyone got figures?
What a good job then (as all commodities are priced in dollars) that we have Mervyn King at the head of our banking system to rally our currency into a tailspin with his ***king stupid speech!
RCG nearly there, the only problem is that all these prices are in dollars.
The UK’s economy is in a worst position than the rest of the world, and as already mentioned, thanks to a push by Mervyn King the Pound has dropped significantly. A five year low. The pound has also fallen against the Euro.
Exports are great though if you don’t import any materials.
Still crossing our fingers might help.
The economy will do what it will, we simply have to work within the parrameters that we are presented with. The market for windows and doors in the uk is going to decline further inline with the general economy, and confidence as a whole is going to be weak untill we see an end to the fall in house prices, something we probably won’t see for at least 6 months. The only thing that will halt the fall in house prices is steep cuts in interest rates followed up by the banks freeing up the general availability of credit. Once first time buyers have access to credit at reasonable rates and see an opportunity to get themselves on the housing ladder house prices will level off. The thing is that there is such a shortage of homes in this country I don’t think it will be long after that before house prices begin to incease again. This time though I don’t think the banks are going to be offering anything more than 90% mortgages and so house price inflation should be sustainable in the long term.
With regard to the fall in commodity prices and the willingness of systems companies to reduce their prices, it seems, if you are to believe the rumours, that very few of them are making any money and the most recent gossip says that Rehau is to introduce an energy surcharge. Energy prices show no signs of follwing the price of oil at the moment, strange as it was the link to oil prices that we were told was the reason for the huge increase in gas and ellectricity prices, so this may just indicate where the price of profile is like;ly to go, certainly not down. I am not an appologist for systems houses but there is enough competetion in their market to ensure that any price increases are kept to a minimum. The cost of hardware raw materials is on the decline and as most hardware now comes from China and the cost of shipping it around the world is falling we should expect to see falls in the cost of hardware, again another fiercely competive market, in the near future. My mate Simon Dickinson won’t be pleased to hear me say that.
Anyway enough of me I’m off for my regular morning chat with Robert Peston, well someone ’s got to keepthe poor chap up to speed.
Raw material prices fall?
Trying telling that to Bostik!
Is anyone else sick of their price hikes this year?
“As for glass prices and the energy surcharge … I’ll save that post for another day”
Has that day come yet?
Sort of. I since posted this:
http://renegadeconservatoryguy.co.uk/glass-makers-fined-1bn-for-fixing-prices-in-car-market/