Cost of materials

The current cost of materials is putting me off starting some projects at the moment. I was buying from a company not too far away but his prices for even mild steel and aluminium alloy doubled a while back and I reckon it’s nearer three times the price it was now. I have bought some stuff online at a pinch but obviously shipping adds to the cost. Is the cost of metals going to stay this high or do you think they may slowly go back down a bit over time?

The biggest change causing the rise is the cost of energy. May go down long term, but with the push to make it greener , possibly unlikely. Whenever I buy anything I tend to buy in bulk as a future buffer against rising costs. It does mean that I have much that I will never use, but it has saved me money overall.

I doubt with increasing energy prices that model materials in any form will come down in price. Years ago steel prices trebled and we had to buy a tonne at a time of a particular size just to get it. Watching YouTube videos on building wooden structures they say board prices have dropped over the last twelve months where as an email I get each month from a UK supplier tells me all building materials are rising some months between 5 and 20%. I generally have a bigger buy and bite the bullet sourcing all from a known relatively local supplier, but even then some sizes are not always available.

Like Keith I tend to buy more than I need for immediate use to create a stockpile for future needs. I often buy online and postage costs can be minimised by bulk buying. A few years ago I bought a large sheet of aluminium alloy, 12mm thick and thought at the time I would never use it all, but it has almost completely been used up.

Doug

Do you use any particular online suppliers Doug?

Prices are unlikely to drop, even when energy costs and logistics issues are resolved. Once sellers establish a price that the market will bear, why would they drop it? Nice work if you can get it.

Why would they drop it? For fear of loosing trade to others offering the goods at a lesser cost who just work on adding a percentage to their purchase cost

Yes according to free market theory, competition should force prices back down. But somehow in reality it rarely works out that way.

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To demonstrate your point:

The highly competitive [consumer driven] Supermarket Petrol-price has been forced down quite dramatically: Yesterday, I paid “only” £1.59 per litre for Tesco Momentum … which is a massive reduction from its recent peak.

MichaelG.

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Silly typo …

That should read £1.569 per litre

Yes. Petrol prices go up and down all the time. I have yet to ever see retail steel and aluminium prices go down. Or most other consumer goods for that matter.

What I tend to do Vic is surf ebay for the best deal for what I want. There can be large differences in price for the same items between different suppliers. Postage costs can also vary a lot but don't get me started on "Free Postage "

Doug

Or maybe not! Whilst the cost of energy doesn't help, it's just one of many factors driving the global economy.

Focussing on the UK, this graph shows the value of the pound has been falling since the 13th century!

The graph goes up to 2019, since when the value of the pound has fallen even more sharply. The decision to leave the EU and Covid have had a much larger impact on costs in recent years than Green. Inflation is at a 50 year high, between 5% and 18% depending on what you have to buy or sell. It's a mixed and hideously complicated story, house prices are slowly falling, but food and material prices are rising sharply. The ability of the private sector to pass inflationary price rises on to customers has resulted in a rash of public sector strikes, because their pay lags a couple of years behind the rest of the labour market. Nurse either strike or leave and work for the NHS via an Agency. Ironically, the government can't afford to pay nurses directly, but it can afford to pay the higher rates charged by Agencies. And this despite Agency staff being less effective, because they lose continuity and team spirit due to being used to fill gaps.

Interesting discussion this morning on the radio about the US Coal Industry. Lots of coal in the US, but the industry is struggling despite strong verbal support and anti-green action from President Trump throughout his term.

In practice the politics is almost irrelevant, US coal is currently caught between a rock and a hard place. The rock is the availability of cheap gas in the US. Not only cheap, but much cleaner and easier to use than solid fuel. The hard place is the rapid rise of cheap green electricity in the US because it's commercially profitable: 8 times more green installed under Trump (anti) than Obama (pro).

The market drives prices, not politicians. In the case of US Coal, customers prefer cheap clean energy to a dirty fuel that costs more.

The same sort of forces drive other costs in much the same way. Prices are rising in the UK partly because the whole world is chasing commodities in short supply, an issue related to Covid, and partly because the failure of certain politically motivated actions undermined the UK economy.

Blaming prices rises on Green doesn't help because the real problem is far more complicated!

Dave

It's a pity that my pension does NOT keep up with inflation.

This is because it's index linked to CPI rather than RPI (a change that was made without consultation)

My only hope is that I'll die before I run out of money.

MC

Metal prices have started to come down, I see this in my day job.

If I want/need metal I just buy it, even at 100% loadings it's still worth the pleasure I get from machining it in to swarf/scrap/maybe useful tools.....

Jim

You need to check the prices at internet suppliers and choose the cheapest but also check their carriage charges as they can vary considerably, I recently ordered a piece of cast iron 210 mm dia by 20 mm thick and paid £16 for it, the same piece from a long-standing model engineering supplier would have been more than twice that at £36, both prices are plus VAT and carriage. Do you homework before ordering, there is no easy way to get better prices. Dave W

I don't bother with the online stores anymore unless I'm in a pinch and need to order something weird or am so busy I need delivery.

Both the profiler I use and my two most local stockholders, offer substantially better prices than anything I can get on the internet, even if at the moment their quotes are valid for a maximum of 5 days.

In fact it's often no more expensive to order stuff laser or flame cut from the profiler than it would be to order a sheet of steel on the net and do the cutting myself, and they do free delivery (unlike the two stockholders who charge for small deliveries but will sell ex-works same-day).

It's also notable that if I'm buying larger material (heavy sections, thick plate, large bar-stock, and especially pipe) the stockholders go from "a little bit cheaper" to "like half the price" compared to the internet resellers.

Ordering from a seller who is set up predominantly for trade customers can be awkward at first, but if you know what you want, is generally a nicer customer experience even if you're not a business customer.

I grab every piece of metal I come across and add if to my stash, and have regular culls of what I see has been replaced by a superior example of similar dimensions. My local scrapyard also allows me to have a wander in the yard for offcuts if they are not working machinery, and also holds back anything usefull to sell back to industry and domestic users. If you are lucky enough to have any local engineering firms Try them too! A club approach to a local yard and cash up front can get some amazing bargains! The prices of all new metals are astounding at the moment, and although we do not know the technicalities of the "scrap" we are actually buying, a few experiments on it will gain an understanding of whether or not it will suit our purposes. If it fails we can always make another!

Phil

My plan is to spend the last of my beloved spondulicks just before the grim reaper arrives. I've looked for a loophole, but you can't take it with you...

Dave