Metals prices play havoc with supply

Zinc and Copper have seen a 300% hundred percent rise whilst metals such as nickel, brass and stainless steel have risen by about 250%.

Over the past year, much has been said about the rise in oil prices and shortages of supply.

For the engineering sector there has been an even bigger concern.

The price of many metals has risen beyond comprehension.

Zinc and Copper have seen a 300% hundred percent rise whilst metals such as nickel, brass and stainless steel have risen by about 250%.

This rise has been dramatic and unpredictable, leaving the entire UK engineering sector struggling to make sense of it.

Those in the manufacturing sector are amazed that this issue is not making front-page news or being debated in the House of Commons, as the current state of the metal market is having a big impact on the world economy.

For companies such as Ladbrook Engineering in East Anglia, a specialist in pressed metal parts, its been a roller coaster year.

Much of their production is for industries, using a lot of copper, brass, zinc and stainless steel.

In their 70 years of press metal production, they have never experienced such dramatic metal price rises and a seemingly lack of availability.

Letters have been sent to government bodies with "Global" issues mentioned in the reply.

"The problem we face is that the markets we trade in are already under pressure on prices and our partners cannot pass this increase onto the consumer, so the pressure is very much downwards," said Paul Goodman, Manufacturing Director.

"We've had to work closely with our customers and suppliers to explore all our options".

In some instances, Ladbrook have undertaken complete redesigns of components, using the latest 3D computer aided design technology to reduce the metal content, or a change in design through production engineering principles.

In several projects the material has been changed to reduce the cost of the parts yet still meet the required specifications.

Although reinvestment in state of the art equipment has helped stabilise their cost base over the last couple of years, this progress is simply being eroded by metal prices.

Another area of focus for Ladbrook has been that of 'scrap'.

In the past, scrap metal, which is kept to a minimum using press tools, was collected and sold at a nominal price.

Today, 'scrap metal' is very much part of the core controls within the company.

Indeed, the management at Ladbrook have had to become much more aware and active in trading metal and scrap metal in order to meet and maintain their customers needs.

"Just like stock brokers, we now follow the market and look to buy at the right time and at the right quantities.

"With the scrap, we now arrange for what is called 'toll melting' or 'transforming', that is, we ship our scrap back to the foundry for re-smelting into clean metal.

This can all make a big difference to the price stability of components that we supply to our customers".It also means that Ladbrook have offered a much more stable pricing structure over recent years creating a win win for customer and supplier alike.

Customers are also very much aware of the material problem and have worked closely on long term partnerships with medium to long term scheduling of their parts .

Another East Anglia engineering company, Acro Precision Technology, has also found itself adjusting to this new environment.

Acro machine precision turned components for the electrical, medical and automotive sector using 24 hour unmanned machines.

"I have to confess that these metal price rises have caught us out once or twice and we are having to give a lot of thought when quoting new projects and when buying in stock," said Fred Pain, General Manager.

"In general, our 24 hour machines give us a big advantage over the competition when it comes to pricing for high volume production but buying the metal at the right price, managing scrap and managing customer expectations have become very important aspects of todays machining environment." Although both Ladbrook and Acro have concerns over the general impact of metal prices on the wider economy, both companies have an optimistic outlook.

Both companies are seeing work, that had been exported to Far East, being brought back to the UK.

They speculate that it might be that high oil prices are making such shipments less cost effective or simply that the Far East are also now experiencing metal shortages and very high metal prices.

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