In response to customer feedback received after the issuance of our May 8th letter, we’re facilitating the pass through of our non-copper materials costs, addressing the need to be administered at a line level in order to ease the pass through to end users.
We appreciate that a need to increase prices is understood, considering the headwind specifically on steel, aluminum, zinc, as well as the additional freight costs now in play. To make this as seamless as possible across all current systems, we’re addressing the approximate $10/1000ft surcharge directly into each cable line item purchase price by adjusting our list prices by approximately $30 to accommodate the calculation. The additional pricing will also be viewed as part of overall sales dollars purchased.
New list price sheets to facilitate this change are available here. Please reach out to your Inside Sales Manager or Regional Sales Manager if you have any questions.
The effective date for the implementation of the adder is May 25, 2018.
Again, we thank you for your cooperation, understanding and support. Our bullet points below, continue to apply, and remain for your review.
- Extreme pressure on margins and spreads – all material and non-material costs.
- Steel, Aluminum and Zinc at historical highs.
- Cable products, on average, contain close to half of non-copper components (steel or aluminum represents the bulk of that half).
- Industry moves up and down with copper, never addressing that almost half the cable products content is non-copper.
- Copper fluctuating up and down mostly between $3.05 and $3.15 – causing high volatility to sell price vs. costs.
- Competition currently reacts to copper swings, negating any traction against all non-copper components of our products.
- Freight increases in the 18% to 23% range – equipment costs, fuel surcharges, shortages of available trucks, all a factor.
- Actual average impact of additional costs ~ $10/1000ft of all cable product sold.
Steel Costs Near Record Highs
- In January 2018 Commerce Secretary Ross recommended the president should take some type of action against imports that were causing injury to steel which is critical to national security.
- Towards the end of October, domestic steel mills began raising their prices and continue to raise prices.
Aluminum is up over 50% since September 2016
Zinc has more than doubled since 2016
Freight (not including fuel surcharge)