Hefty price increases in metal industry

31/01/2007 14:00

As a consequence of substantial increases in metal prices on the global market, companies in the basic metal industry raised their prices significantly in 2006. Prices of non-ferrous metals rose by even more than iron and steel prices. Prices of metal products also rose, but more moderately.

Basic metal prices up by 16 percent

Factory gate prices in the basic metal industry rose substantially in 2006. Prices of primary metals rose almost continually through the year. In December prices were 16 percent higher than in December 2005. Prices of non-ferrous metals rose by most. In December selling prices of aluminium, lead, zinc and copper were on average 37 percent higher than in December 2005. Primary iron and steel cost 8 percent more, iron and steel tubing cost 9 percent more in December last year than twelve months previously. Prices of cast metal products were only 2 percent higher.

Factory gate prices of basic metal products

Factory gate prices of basic metal products

Global prices of non-ferrous metal reach record high 

Global metal prices rose very sharply in 2006. Metal ores cost 80 percent more in December than twelve months previously. Global prices of aluminium, copper, lead and nickel rose to record levels. On 12 May 2006, the copper price reached a record 8,785 dollars per tonne on the London market. Since then the prices on the world market have dropped to around 6,700 dollars per tonne in December 2006, but this is still 50 percent higher than in December 2005. In the course of January 2007 the copper price has fallen further to around 5,600 dollars. Prices of zinc and nickel  were two and half times as high as in December 2005.

Global market prices, December 2006

Global market prices, December 2006

Price rise for metal products more moderate

Selling prices of metal products also rose, but the increases were more moderate than in the basic metal industry. The level of selling prices of metal products has consistently been 5 percent higher than twelve months previously since July 2006.

Factory gate prices of metal products

Factory gate prices of metal products

The price rise was largest for tanks and reservoirs, which cost just over 13 percent more  in December 2006 than in December 2005. Prices of scissors and shears, knives and cutlery, and wire products also rose by more than average. Prices of boilers rose by least: 0.6 percent.

Factory gate prices of metal products, December 2006

Factory gate prices of metal products, December 2006

Gerard Taal