Copper prices
- Thread starter jes25
- Start date
- Status
goldstar
Senior Member
- Location
- New Jersey
- Occupation
- Electrical Contractor
Copper prices are very volatile and they're increasing on a daily basis. Building construction in countries like China are primarily responsible for the increase in demand. Most of the supply houses and the Big Box Stores are using what is known as the LIFO method of accounting (last in - first out) as opposed to FIFO ( first in - first out). It has to do with the way they value their inventories.
If you purchase a skid of wire (500 rolls) at the beginning of the month at, say $30.00 per roll (total cost $15,000.00) marked it up at 1.5 (selling price $45.00/roll) and sold half of that skid and then bought another skid the following week at $35.00 per roll (total cost $17,500.00) and marked it up at 1.5 ( selling price $52.50/roll) and sold all of that and the remainder of the first skid at its original price your net profit would be $16,250.00 (500 rolls x $15.00 profit + 500 rolls x $17.50 profit = $16,250.00. )
If you used the LIFO method under the same conditions you would have sold 250 rolls of the first skid at a $15.00/roll profit, 250 rolls of the first skid at a $22.50/roll profit and 500 rolls at a $17.50/roll profit as follows :
(250 rolls x $15.00 profit + 250 rolls x $22.50 profit + 500 rolls x $17.50 profit = $18,125.00). You get windfall profit on the remaining 250 rolls of the first skid of $1,875.00
Now, what I really think is happening is that many of these companies are watching the market, finding out what the copper prices are in the marketplace and raising their prices even before they make any new purchases. Now, that's what I call a windfall !!! God Bless America !!!
This was only a dramatization folks. I really don't know what the mark-up on wire is but I hope I made my point.
Just editing my math. The gray matter in my brain is going rapidly !!!
If you purchase a skid of wire (500 rolls) at the beginning of the month at, say $30.00 per roll (total cost $15,000.00) marked it up at 1.5 (selling price $45.00/roll) and sold half of that skid and then bought another skid the following week at $35.00 per roll (total cost $17,500.00) and marked it up at 1.5 ( selling price $52.50/roll) and sold all of that and the remainder of the first skid at its original price your net profit would be $16,250.00 (500 rolls x $15.00 profit + 500 rolls x $17.50 profit = $16,250.00. )
If you used the LIFO method under the same conditions you would have sold 250 rolls of the first skid at a $15.00/roll profit, 250 rolls of the first skid at a $22.50/roll profit and 500 rolls at a $17.50/roll profit as follows :
(250 rolls x $15.00 profit + 250 rolls x $22.50 profit + 500 rolls x $17.50 profit = $18,125.00). You get windfall profit on the remaining 250 rolls of the first skid of $1,875.00
Now, what I really think is happening is that many of these companies are watching the market, finding out what the copper prices are in the marketplace and raising their prices even before they make any new purchases. Now, that's what I call a windfall !!! God Bless America !!!
This was only a dramatization folks. I really don't know what the mark-up on wire is but I hope I made my point.
Just editing my math. The gray matter in my brain is going rapidly !!!
hardworkingstiff
Senior Member
- Location
- Wilmington, NC
Most of the suppliers I know use the "replacement cost" for pricing. The theory is when copper comes down, they will be stuck with high cost wire that will need to be sold at the replacement costs (due to competition) so they feel they need to sell it at replacement costs while it is rising in order to make the money now that they will lose later.
I happen to agree with the strategy.
I happen to agree with the strategy.
I am still working off my last purchase of Romex. For example 12-2 was 31.00 & my 12-3 was 42.00. When I bid a house, I don't tell them anything about what I paid for the wire. It is all priced out in replacement cost as of the bid date. Nobody gets a great deal because I have thousands invested in my wire purchases. But now the down side is I AM ALMOST OUT! I can't believe what I am going to be paying. I have gotten real spoiled with the mark up. I am not sure if I will buy in quantity this time or what.
77401
Banned
8/3 Romex 125' $133 at Home Depot.
Good thing they keep the heart defibralator near the check out.
I needed it.
Good thing they keep the heart defibralator near the check out.
I needed it.
kelley
Member
- Location
- Massachusetts
- Occupation
- Estimator
Got a quote today for 2/0, 4conductor mc copper.......$10.76/ft :shock:
we need 450 ft
price is good till 5 pm tomorrow
we need 450 ft
price is good till 5 pm tomorrow
electricmanscott
Senior Member
- Location
- Boston, MA
250" roll of 14/2 romex....$58.00 today. Gas $105.00 to fill tank. Health insurance up another $140 bucks a month. I am losing jobs because I am too high. :roll: Stinking hacks must like to work for nothing. :evil:
I think things are going to go right into the toilet this year.
I think things are going to go right into the toilet this year.
hardworkingstiff
Senior Member
- Location
- Wilmington, NC
electricmanscott said:I think things are going to go right into the toilet this year.
I have a concern like this. My gut says watch out. I still see big companys reporting good earnings, stocks are making new highs (this gives the economy a "feel good" mentality). There is a lot of activity in the NC area.
My gut says "watch out", but my eyes tell me things are great.
Pierre C Belarge
Senior Member
- Location
- Westchester County, New York
Supply house called me this morning to tell me that 500 kcmil is $10.07 a foot!!!!!!!!
2 1/2 weeks ago it was $6.47 a foot. :shock:
This and other prices are making contracting hell in NY.
2 1/2 weeks ago it was $6.47 a foot. :shock:
This and other prices are making contracting hell in NY.
77401
Banned
electricmanscott said:250" roll of 14/2 romex....$58.00 today. Gas $105.00 to fill tank. Health insurance up another $140 bucks a month. I am losing jobs because I am too high. :roll: Stinking hacks must like to work for nothing. :evil:
I think things are going to go right into the toilet this year.
14/2 Home Depot Houston $42
Tank of Gas for the van $101
Ticket for illegal left turn $175
Illegal Hispanic hourly labor $8 Hour
Not having to work because my prices are too high....PRICELESS
For everything else... Theres Master Card
:lol:
Ok Ok. I can't sit back and listen to this B.S. without chiming in. It appears everyone has been falling into the hype of the media. Does everyone think we are simply entitled to $2 gallon gasoline? I guess we're all entitled to food stamps and the like also! Our supply has stayed the same due to restrictions in drilling for oil in the Gulf of Mexico, Alaska, etc...yet our demand has skyrocketed over this same period. I am sure there are a number of people reading this who own SUV gas hogs, etc., and that could be part of the reason why our consumption has gone so high. And then there are those who complain about gas prices but they sure haven't change their lifestyles. A guy at the gas station the other day was bitching and moaning about prices, yet he was gassing up his boat and SUV for $137...something wrong with this picture? If it's that bad, then cut back buddy! There was a time in my life when I had to use my credit card to purchase a bag of chips and a soda. Do you know what I did???? I went out and worked a little bit harder. It's not that hard to figure out. Work harder and more efficiently and good things will happen. I get so tired of hearing the media say how horrible the economy is and how the real estate bubble is going to burst, blah blah blah. Fact of the matter is that the economy is flourishing, the bubble is not going to bust, and we are in the greatest country in the world. I will spare you all my argument for the War in Iraq. We have some great men and women fighting for our freedoms. Maybe we should all go live in Mexico today if we have it so bad. We have everything anyone could want living in America. Rock on!
- Location
- New Jersey
- Occupation
- Journeyman Electrician
sroc2006 said:
I didn't know that we had W on this forum. :wink:
- Location
- Massachusetts
Members, be careful where you go in this thread.
Keep the focus on the subject of 'Copper Prices' do not shift this toward political discussions.
Keep in mind this is an NEC forum, not a political forum.
If you want to discuss political issues you can use the PM features.
Keep the focus on the subject of 'Copper Prices' do not shift this toward political discussions.
Keep in mind this is an NEC forum, not a political forum.
If you want to discuss political issues you can use the PM features.
electricmanscott
Senior Member
- Location
- Boston, MA
The point of my comments was lost on one of the following posters. I can not cut back on my gasoline usage. That would be get to a job or not. No brainer there. I also have no control over the price of copper. What to do there?
The price of fuel impacts what we pay for every product we buy. There is no way we can keep skipping merrily along the way things are going. Something has to give. I predict it will be people just stop spending.
I do not have the answers although I do have opinions which are not based on my political views. One such opinion is that we are getting a royal screwing from "big oil" as they like to be called.
The price of fuel impacts what we pay for every product we buy. There is no way we can keep skipping merrily along the way things are going. Something has to give. I predict it will be people just stop spending.
I do not have the answers although I do have opinions which are not based on my political views. One such opinion is that we are getting a royal screwing from "big oil" as they like to be called.
77401
Banned
I agree, short of my work van & the low gas mileage it gets, I have always bought fuel efficient cars. But even though my Porsche gest 17 MPG city, and premium is over $3.50, as my right to free speech allows me to bitch, I will if I want. As you say, luckily the ecomomy is flourishing & I can afford it, and my 6500 sqft house.
But to stay on contect of the thread. My material markup stays the same regardless of my cost. The more it cost, YES!!! the More I make.
FYI, Exxon's net profit margin is the same 6% it was 3 years ago.
How many of us contractors can live of of only a 6% Net margin?
But to stay on contect of the thread. My material markup stays the same regardless of my cost. The more it cost, YES!!! the More I make.
FYI, Exxon's net profit margin is the same 6% it was 3 years ago.
How many of us contractors can live of of only a 6% Net margin?
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