On February 22nd, the MWFA was fortunate enough to have two industry specialists, Bruce Darling/Porteous Fastener and Bruce Wheeler/Star Stainless Screw address the group. Their Material Market Update report warned of the volatility of our market.

Between the two of them the “Bruce Team” has traveled overseas over 1,000 times and visited over 400 factories. This allows their expertise to come first hand rather than just from research. They warned of the rising costs of nickel, stainless steel, low carbon steel, bronze, brass and other materials.

Mr. Wheeler reminded the audience a low supply and high demand will drive prices up. Prices may change daily; therefore, it is wiser to buy more often rather than retain a high inventory at a high price in the event prices decline. Quotes are normally only valid for three days allowing the seller to maintain selling price in conjunction with their fluctuating buying price. What we are seeing is a typical cycle which occurs every five to seven years.

The fact that competition is fierce was reinforced by Mr. Darling. He noted clauses for renegotiation are not easy to negotiate. It is very difficult to maintain prices. We were still experiencing high fuel costs and fuel surcharges running as high as 25%. Once the World Trade Organization puts pressure on China, then there may be a move.

As Mr. Darling stated: “Trying to predict the future is always speculative.” Despite reading periodicals and talking with suppliers, there are no definitive answers. This year’s steel pricing increase announcement dates have been thrown off due to the Chinese New Year being later (holiday beginning Feb 17th) . Traditionally steel price increases have been announced just after the New Year holiday is over; however with the late date steel prices have been moving upward.

It is best to stay as educated as possible regarding materials world wide to most efficiently price and inventory product in today’s market. The Bruce team demonstrated the importance of following information on a daily basis to continue to manage successful businesses.