Copper Price Increase
After two years below $2.50/lb, copper prices shot up by 30% in 2017. The price leap is forcing contractors and wholesalers to watch how they buy copper wire for residential and commercial construction projects.
Adapting to Preserve Profit
Jeff Hoyt, Supplier Manager at Crescent Electric Supply Company explains how the price of copper affects his business: “With commodities, never speculate or commit to a long-term price. If you’ve committed to a large buy and prices go down, the customer will want a lower price or back out. Very seldom will you win on a deal like that – you’re more likely to get burned than make money.
“It’s best to just face what the market is doing that particular time and don’t commit to a deal more that’s than 30 days out.”
Hoyt says his electrical contractor customers face similar challenges; “Prices rise and fall, but contractors will be pressuring their suppliers for the best price either way. If prices are rising, the contractor might issue a PO early if they think they’re getting a good price. If prices are falling, they will buy as needed and press for the best current-day price. That’s how they will win bids and honor the price commitment to their customer.”
Use Less Wire, Less Conduit
Levven Controls wire-free switches eliminate an average of 700 ft. of copper wire from new residential builds and help to reduce the impact of fluctuating copper prices for both wholesalers and contractors.
Understand the impact wire-free switching will have on your business.