Supply Excellence — Believe it or Not: It’s Time to Renegotiate Your Metals Buy

Believe it or Not: It’s Time to Renegotiate Your Metals Buy

April 11th, 2007 · by Tim Minahan · No Comments · costing, supply market dynamics

Believe it or not, there may be a silver lining to the cloud that’s been hanging over metals buyers. According to Thinking Cap Solutions, Inc.’s latest analysis of price, cost, and margin trends, now is the time to negotiate price discounts for lead, zinc, aluminum, and copper, among other metals.

In its latest ICE-Alert (www.ice-alert.com) — a proprietary forecasting model that uses multiple indicators to predict price and supply trends for hundreds of spend categories – Thinking Cap reports that producers in these metals industries have room to cut prices from between 12% and 19.%. Specifically, the report indicates that higher prices and lower manufacturing costs should allow buyers to negotiate discounts in the following categories without cutting into supplier margins:

Lead and zinc suppliers have room to cut average prices 19.2%.
Copper smelters and foundries could slash tags 14.3% and 13.5%, respectively.
Aluminum producers could reduce average prices by 12.4% — all while without disrupting margin levels held over the past five years.

And that’s just part of the good news. The latest ICE-Alert report identifies 183 industries where average product prices can decline without reducing supplier margins due to manufacturing efficiencies, logistics, and material input cost changes. Producers in 53 of these industries could cut average price tags by 5% or more.

Supply Excellence readers can order the complete report here or by contacting ICE-Alert Editor Elizabeth Baatz at ebaatz@ice-alert.com.

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