Those of you who follow the markets may have noticed the sharp incline in the costs of raw materials, especially copper. Due to enormous growth in the emerging economies such as China and India, the prices for basic building blocks such as copper and steel have rocketed, with the price of copper alone rising from $4,500 per ton to a high of around $8,600 at the end of May 06. Add to that the recent scandal of the rogue trader in China who racked up losses of many millions of dollars buying short on futures in the world metal market. His gamble being that the price of copper would decline. In the futures trade market, a short position happens when a trader borrows a commodity to sell it, believing the price will drop and therefore can buy it back later at a lower price.
The net result is that stuff that uses copper to manufacture, such as audio cables and printed circuit boards have increased. Canford Audio, renowned audio supplier to the professional market, have sent out a copper surcharge warning to itâ€™s UK customers notifying them of a 16% increase cable prices.
Canford go on to say: â€œWe would like to think that prices will fall back somewhat and stabilise, enabling us to reduce the surcharge level. However itâ€™s not possible to know when that might be.â€�