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Ahead of the Curve Auto Supplier Blog

March 09, 2016

Will raw material prices finally rebound? And, if so, are you “Stuck in the Middle”?

Per a recent article in the Wall Street Journal, the benchmark price for iron ore hit a nine-month high of $62.60 per metric ton on March 7 (up 20 percent that day!) and is up almost 60 percent since January 12.Other industrial metals, such as copper, are also up from multiyear lows, for instance, Zinc is up 13 percent and tin has risen 19 percent. Oil is on the upswing as well. Why? One suspicion is that China may be positioning itself for another stimulus package focusing on massive infrastructure improvements which, of course, will require a huge amount of steel.  

So this begs the question: what do your contracts specify regarding raw material prices? Are you indexed? Are you protected both up-stream and down-stream from these pricing fluctuations or are you about to become “stuck in the middle” so artistically sung by the appropriately named band, Stealers Wheel. Click on the following YouTube link to listen to Stealers Wheel while you reflect on your current situation. Then contact the automotive contracting lawyers at Warner Norcross if you need help.

https://www.youtube.com/watch?v=OMAIsqvTh7g

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