When will it end? Material costs

[ukracer]

When will it end......................? When we decide it does and stop believing the constant "hype" peddled by the MSM...........
What is it this week, fireworks, CO2 (thought there was too much of that?? ), bog roll, Xmas dinner, HGV drivers, glass test tubes, gas, energy, wind, broadband width, broccoli, paint, water.....................

So who should we listen to?

I can see this going pear shaped soon so I am out,..lol

 

[zeppelin builder]

As Gaz highlights, my product may cost a quid and the sale price be a, rather greedy, tenner, but if the share holders milk £9.50 every month, so the company is already running on debt, then it doesn't take much of a price rise to make the debt level unsustainable and push the company into liquidation.

Which, in the case of "virtual" companies, with zero real assets, just buying and selling energy, is, I'm sure, an easy option.

Go bust, shed the debt, start trading again when it's all blown over.

I don't know the sector at all, but just because a company fails does not, in any way at all, prove it was not making significant profit.

 

[eLuSiVeMiTe]

What we are witnessing is world industry frantically trying to catch up on lost production/revenue, here the government's help via furlough/bailout schemes etc has helped but must have been a sticky plaster on an axe wound for most factories/industries. I think this is a short term blip while the world gets back to work and the producers restore stocks of materials, there will be repercussions, I know of several projects on hold that will stay there until prices stabilise, these wage hikes are also causing problems but thats the way it is. Boom and bust here we go again, lets all walk over the edge of a cliff with our eyes wide shut

Bob

I'll put money thatthe prices never come down again

 

[Ubique]

Germany in the 30s comes to mind.

Not really, the Hyperinflation has it's roots in the punitive reparations pushed for by the French, amongst other things. Germany (which had by the 1930's been a 'state' for less than sixty years) essentially 'failed' monetarily in the 1920's. see 'When Money Dies: The Nightmare of the Wiemar Hyper-inflation' for more details. The conditions were very different. It could happen, only on a near-global scale though - so in reality it would just be a rebalancing (or quantative easing, to use a phrase) of exchange rates and worths. A graph of prices in isolation is pretty meaningless without a frame of reference (in this case, other energy sources, income, inflation etc.). It does underline (to me) that we have become too reliant on foreign supplies, with fragile trade routes, relations and little, if any second-line suppliers. Now we are not shackled by EU doctrine, we have the freedom to, and have exercised the ability to act quickly and decisively, as with Covid-19 vaccine strategy, for example.

 

[8ob]

I'll put money thatthe prices never come down again

Not so sure, steel @150% recent increase cant stay at that because demand will fall, steel mills need the gear sold and will have to get real once this little panic is over. That and a few others like timber will follow, as soon as there are stocks and surpluses about things will level out, not saying they will go back to where they were but prices will fall.

Bob

 

[ronan]

Just seen in the news, that the two fertilizer/co2 plants have been kept open in a deal with the Uk government, and that the tax payer will foot the bill.

 

[MysterG]

I gave up on doing my building work this year due to silly timber prices and availability.
It'll get started when things settle down a bit.

 

[4String.]

Just seen in the news, that the two fertilizer/co2 plants have been kept open in a deal with the Uk government, and that the tax payer will foot the bill.

Which is a bit of a "catch 22" swings and roundabouts situation for me.

A fair portion of our company's work is hauling bagged fertiliser out of Ince and the result of the plant being closed is that we don't have as much work so we don't earn as much money and consequently we pay less tax. If the government bail them out we all have to pay for it but we're earning more and thus paying more tax. I don't personally know which is preferable, earning less and paying less tax or earning more and paying more tax

The other side of it is that we're just one small haulage company. Those 2 plants employ a lot of folk who all earn good money and their products are supplied to many businesses who all pay for it, so keeping them closed simply removes a lot of money from a lot of local economies.

 

[8ob]

I gave up on doing my building work this year due to silly timber prices and availability.
It'll get started when things settle down a bit.

Its not like the roadside timber prices have gone through the roof, yes they have gone up a bit but nothing in comparison to the processed product.

Bob

 

[The_Yellow_Ardvark]

Last year.
Over night pallet to the IOW was £ 65.
From the supplier, now it is £156.
OK. Not my pocket Bering emptied. But I can't find out a sensible reason why.

 

[fizzy]

Last year.
Over night pallet to the IOW was £ 65.
From the supplier, now it is £156.
OK. Not my pocket Bering emptied. But I can't find out a sensible reason why.

We are cheaper than that to the IOW.
But the prices are rising due to the big increases in wages and the shortage of lorries.
Networks have started brining in tail lift surcharges or home delivery surcharges now.

 

[The_Yellow_Ardvark]

We are cheaper than that to the IOW.
But the prices are rising due to the big increases in wages and the shortage of lorries.
Networks have started brining in tail lift surcharges or home delivery surcharges now.

I am not involved in the shipping side.
But last year it was shipped to the ferry dock. Loaded and we collected from the island side.

OK. This is a rush job. But same supplier.

As long as I get my parts.

 

[MattF]

I'll put money thatthe prices never come down again

It will. Maybe not down to the same level, but produce needs to be sold. If anything is sat there not selling, it's worthless. Business can't survive on that.

 

[Keith 66]

I worked in the boat trade most of my career, Its weird at the moment, maybe because people cant fly abroad but the secondhand boat market has gone crazy. Bigger newer boats in good condition are selling like hot cakes as soon as they go on the market.
The flip side is that cheaper old stuff is going for peanuts if anything at all.
Loads of boats moving in our club alone & some real bargains been had. Not by me i hasten to add!

 

[Munkul]

Not so sure, steel @150% recent increase cant stay at that because demand will fall, steel mills need the gear sold and will have to get real once this little panic is over. That and a few others like timber will follow, as soon as there are stocks and surpluses about things will level out, not saying they will go back to where they were but prices will fall.

Bob

Will the demand fall? I don't see it. Prices for steel are crazy compared to the last few years but all the companies and customers I know are just sucking it up and getting on with it.
I'd sure like to see them drop again, of course!

 

[brightspark]

in the last 30 years we all have had it good not now and it isnt going to get any betterits the youngsters i feel sorry for

 

[Ubique]

Prices are like pendulums, they only swing to the extremes with outside influence, the rest of the time they happily sit in the middle.

 

[8ob]

Will the demand fall? I don't see it. Prices for steel are crazy compared to the last few years but all the companies and customers I know are just sucking it up and getting on with it.
I'd sure like to see them drop again, of course!

I believe that it will and as I mentioned before I know of a lot of shelved developments, its only due to covid that current stocks of just about everything are so low. Some businesses have no choice but to cough up, others I know of are sitting it out.

Bob

 

[ronan]

in the last 30 years we all have had it good not now and it isnt going to get any betterits the youngsters i feel sorry for

Buying somewhere to live for instance, crappy apartments made out of old weetabix boxes and tar felt going for 600k . I think if i had to live in an apartment, i'd chuck meself out the window.

 

[ukracer]

Not really, the Hyperinflation has it's roots in the punitive reparations pushed for by the French, amongst other things. Germany (which had by the 1930's been a 'state' for less than sixty years) essentially 'failed' monetarily in the 1920's. see 'When Money Dies: The Nightmare of the Wiemar Hyper-inflation' for more details. The conditions were very different. It could happen, only on a near-global scale though - so in reality it would just be a rebalancing (or quantative easing, to use a phrase) of exchange rates and worths. A graph of prices in isolation is pretty meaningless without a frame of reference (in this case, other energy sources, income, inflation etc.). It does underline (to me) that we have become too reliant on foreign supplies, with fragile trade routes, relations and little, if any second-line suppliers. Now we are not shackled by EU doctrine, we have the freedom to, and have exercised the ability to act quickly and decisively, as with Covid-19 vaccine strategy, for example.

But with that comes the ability to reduce workers rights, working conditions and then some take advantage of cronyism etc.