Raw materials costs raise cable prices in the UK

The British Cable Association has issued a warning that cable product prices are certain to rise given the dramatic increases in raw material costs around the world.

The Association, which represents 85% of the UK’s energy and data cable manufacturers, says that with cable raw materials accounting for over 60% of total production costs, cable product price rises are inevitable.

The economic boom in China has facilitated massive amounts of construction, pushing demand for materials to acute levels. In addition to this, the aftermath of the Iraq war also sees oil prices escalating, affecting manufacturing costs and petroleum-based product prices.

The organisation is not positive in its future outlook either, stating that it does not envisage any easing of cost pressures in 2006 and beyond.

With the price of copper and steel doubling in recent times and plastics materials prices driven up by between 40% and 50% due to increases in the cost of oil, the BCA sees no end to the problem. In addition, both copper and steel are currently in short supply due to the huge demand from the Far East and the building boom in China is showing no sign of slowing. In fact, China’s demand for materials looks set to increase, with the subsequent cost of products likely to worsen in the near future.

Looking forward from 2005 towards 2006 and beyond, the BCA forecasts that these outside influences will eventually lead to a true market shortage, resulting in product allocation. The Association says that manufacturers are attempting to soak up these inflationary pressures, rather than simply passing them on to the buyer.

However, with factory costs escalating at the fastest rate in 20 years, these collective circumstances mean that manufacturers will inevitably have to realign factory door prices in order to assure their own survival.