Over the last few days, near the end of September 2011, copper has been volatile to say the least. It’s been from $4.00/lb down to $3.20/lb and today it’s back up to $3.50/lb. We can’t predict what’s going to happen to copper over the next week, month or year but we can help you understand the pricing as it is today.
When copper goes up it seems like pricing changes very fast so it’s important to check competition to keep everyone honest before buying any type of copper electrical wire. However, when copper is going down it doesn’t seem to adjust as fast because of how far into the process the copper already is.
If copper drops $1.00 per pound in one day I highly doubt manufacturers or distributors are going to immediately start selling all of their wire and cable at a loss. Copper is bought by the manufacture, then spends about 4-5 weeks in manufacuring to be sold to a distributor who stocks and sells it in smaller quantity.
That’s about 6 weeks worth of time for that particular copper wire to change pricing up and down nevermind one day. So now that copper has taken a down turn how long will it take to really adjust to the new pricing? Probably slightly less than the 6 week cycle because the manufacturers want to rid of their current stock before charging lower pricing for what they have.
Buying a stock on the NYSE low and selling high is the same thought process for a distributor who buys copper and sells it over time. They like to buy low and sell high whenever possible but predicting that process is impossible. Offering your customer the lowest price all the time is a great thing to be able to do, but it’s not always that easy.
In the business world, companies like Home Depot get better pricing on plywood than a small contractor because their volume is so much higher. In the wire and cable world the big guys get better tear pricing, however if they buy at $4.00 copper and the small business buys at $3.00 copper then they can compete much easier.
Always check around for the best price when dealing with any commodity because companies buy at different times so you’ll never know who might have the best pricing.
WesBell Electronics Inc