Did you think that 2020 had been bad with the whole issue of COVID? Well, calm down, because the year 2021 will also be bad, especially for your pockets. Copper, that material widely used in electronics for its good electrical properties and for heat transfer, becomes more expensive. Copper has gone from being a relatively inexpensive material to increase its price by 50% in a very short time.
It has been Igor’s Labs, through a reliable source, who has reported the rise in the price of copper. Manufacturers have been complaining for weeks about the rise in this vital material for the industry. Everything indicates that the price will continue to rise, especially because many manufacturers have begun to accumulate it.
The price of copper is rising at full speed
Some manufacturers have made it their goal to buy as much copper as they can and store it before it reaches an absurd price. The funny thing about this strategy is that it will generate the opposite effect. If a shortage develops, the price will still go up more than if there were no accumulation by component manufacturers.
One PSU manufacturer (possibly the worst hit) reports that it was priced at $ 5,000 per ton at the beginning of the year. We are now at a price of $ 7,500 per ton, an increase of almost 50%. The problem is that the price of this material is expected to continue rising.
Cable manufacturing, for example, now costs 5% more than a few months ago. The components that use this material have also become more expensive by between 6-8%.
According to the manufacturer of power supplies consulted, the price will continue to rise in the remainder of the year. Manufacturers therefore either absorb the increase and take it out of profits (unlikely) or raise prices. The manufacturer of power supplies even highlights that in 2021 they will have to adjust prices to avoid having losses. In addition, they also indicate that the price will surely rise in 2021.
In addition to direct costs, indirect costs must be taken into account
We must bear in mind that the price of copper is calculated in US dollars. Most of the production is in China, so the change must be made to Yuan and Remimbi, the local currencies. The manufacturers will also have to assume the first one that supposes a fall of the Remimbi against the US dollar.
Depending on the amount of copper used and the type of copper, the price increase can be quite remarkable. This is especially noticeable in power supplies, as the coils, transformers, and cables are made of copper. The normal thing is that the components rise at most 10%, since the increase in the price of copper can be compensated in some cases with other materials.
As if that were not enough, the price is expected to go to $ 11,000 in the next year, a rise of 120%. We will see what happens with the price of copper, because it could lead to a fairly significant rise in prices in the industry.