Lead costs are dropping, when do we see results?

[bobotech]

As everyone fully knows, everything is dropping like a rock. Even Oil and metals prices.

Lead is at around 1600 a metric ton as of right now (10-10-2008). That works out to roughly 72 cents per pound of pure new lead. (1 metric ton= 2240 pounds).

Now you take 6000 grains which equals one pound and divide by 230 you get roughly 26 which is how many 230 grain 45acp bullets you can get (approx) from one pound of lead. Take 500 and divide by 26 and you end up with roughly 19 which is about how many pounds of lead it takes to make 500 230 grain bullets. Lets round up to 20 for sake of argument.

You now multiply 20 pounds of lead by 72 cents and you get $14.40. That is almost 15 dollars for the raw lead to make 500 bullets.

So how long before we start to see the prices of lead bullets falling to a more reasonable level? I go to the gun show and pick up a box of lead cast 230 grain bullets and they are about 55 dollars for 500.

I know I'm missing a lot (production costs and so on) but really, bullets shouldn't be what they are priced at considering what lead is at.

If my math is wrong, please explain it to me, its not one of my best skills. LOL

 

[Bartkowski]

I believe there are 7000gr to a pound.

 

[ReloaderFred]

First off, there are 7000 grains in a pound, not 6000. Then there's the problem of the manufacturers who purchased stock when the prices peaked and are still working off that stock. They can't very well price their product at the new prices and stay in business. After they restock at the new raw material prices, then they can adjust their prices, but not until. There is always going to be lag time in price adjustments.

There are also many other factors involved in pricing a product. The cost of producing the product has gone up considerably in the last few years. Take a look at your utility bills for instance. Even though you may not be using anymore electricity that you were two years ago, I'll bet you're paying a lot more for the same amount. I know I am, since my electric company does me the service of tracking my use right on the bill.

The transportation industry is still reeling from the high fuel costs of last winter, spring and summer, so they still have the surcharges tacked onto their fees.

Prices will level out to some extent, but we'll never see them at the level they were two, three or four years ago. None of this happens overnight, and you have to remember that a lot of people will be selling old stock, which they paid premium prices for. They can't sell it at a loss and keep their doors open. At least they can't do it for long.

Hope this helps.

Fred

 

[joneb]

http://www.onlineconversion.com/

 

[ants]

Several members have recently used the commodity price to estimate the value of manufactured lead products, thinking that it is mere mathematics. But it would be highly unusual for the bullet caster to pay commodity price. Commodity price is what speculative traders use for investing purposes at the trading board. By the time a commodity is mined or harvested, transported in bulk to a processing center, broken down into sales units, and distributed to users with additional transportation costs, it is no longer purchased by the caster at commodity prices. The cost of a commodity is also complicated by subsidies and tariffs, which may be applied or withdrawn by a government in a profligate manner at point of export and/or import.

Look up the commodity price of corn or wheat, then look at the cost of an ear of corn in the produce section or a bag of flour on the shelf. It certainly ain't commodity price any more. Then process the corn into a 16oz bag of frozen corn or the flour into bread, and its commodity price is history.

Commodity price of lead is for the commodity investment market. Casters pay much more for their material.

 

[bobotech]

Whopps on the 7000 vs 6000 grains, but that is really irrelevant to the discussion.

What really bothers me is that when things spike commodity wise, such as oil, the price of gas shoots upward inline with the ratio of oil barrel price increase. Same seems to have happened with lead. When lead shot up, the price of bullets shot upwards at the same time even though a lot of bullets were NOS and not newly manufactured.

But now that the price is coming down, the prices of bullets aren't coming down yet. Just bothers m e that the instant raw material commodity price increases, the price of end user goods increase but when the commodity price drops, the end user price is much slower to decrease.

 

[everallm]

Don't look at the absolute price change but the % difference over time, this will give you a ROUGH idea of cost change when applied against the cost of the end item.

Remember as well, many manufacturers try to hedge their raw material costs over time by taking out medium and long term fixed price or futures contracts.Some of these may be 12 months in length.

Until these have run through the supply chain don't expect major price shifts.

 

[Eagle103]

I'm waiting on buying up bullets but I am stocking up on powder and primers. IF the polls are correct and we end up with Democrats controlling everything I don't want to trust that they'll leave us reloaders alone.

 

[Otto]

Last year at this time lead was $1.80 a pound, now it's 65¢.
The excuse that manufacturers are working off old stock is just that, an excuse.
If lead was a penny a pound it wouldn't matter, they're going to charge what the market will bare. Too many people have accepted these exorbitant bullet prices as the norm and the manufacturers couldn't be any happier. Unfortunately, outrageous bullet pricing is here to stay.

 

[swampshooter]

bullet cost

Bullets don't go up as fast as gasoline. By doing a little shopping around I bought quite a few cast bullets last January for about the same price as the lead was worth. Most dealers buy bullets and sell them at the same price until they receive a new shipment. Ask 10 gun shop owners what the spot price of lead is, or how much it went up or down last month and not one will be able to tell you the correct answer.

 

[amlevin]

Bullets are just like any other comodity. The price is determined by supply and demand. If the demand is high for bullets, and the manufacturers can keep their presses running at the current or near current prices, there will be little reduction in price. When supply outstrips demand, such as what happens when someone says "heck, with the lower price of lead and copper I can afford to sell cheaper and steal some market share".

Lead stocks will have to be depleted and inventory costs adjusted to current or future replacement costs before there is any chance of reduction.

Just like gasoline, when a retailer gets the opportunity to make some extra profit, and his customers have become numbed to the high prices, he will stretch the extra profits as long as he can.

My fear is that when prices drop, the "hoarders" will snap up supplies and the price will go right back up.

 

[bobotech]

That is what I'm waiting for, the price of lead and bullets to drop so I can start hoarding again. I would love to buy about 10,000 bullets in various calibers as soon as the prices stabilize downwards.

 

[Sunray]

The price of lead has little to do with the cost of ammo when deisel fuel is expensive. It has little to do with the price of ammo anyway.

 

[Crazy Fingers]

Well diesel fuel has shed a dollar per gallon already and is headed for further drops.

I don't buy this talk that commodity prices aren't directly tied to the price of ammunition. It was certainly their excuse to raise prices. And it's like saying that crude oil prices aren't tied to the cost of gasoline.

The best thing everyone can do is STOP buying ammunition in hopes of the prices going down. This behavior will be what causes prices to drop.

 

[ReloaderFred]

Diesel and gasoline are usually consumed within a week or so of production. Bullets sit on shelves in some cases for years. The only relationship between fuel and ammunition is the cost of transportation, which is involved from the moment the raw materials are removed from the ground, to the final destination.

My point is, the lag time in price adjustments between the two are very different. So is the volume.

There is also the fact that many small bullet casting companies that were around a couple of years ago are no longer in business, due to the high cost of materials. They just couldn't pay those prices and afford to sell competively any longer, so they closed their doors.

Just like we'll never see gas below $1.00 a gallon again, we'll never see cast bullets for $20.00 per thousand again like we did with both just a few short years ago. Lets just hope we don't see a lot of "CHANGE" in the very near future, or it's going to get much, much worse.

Fred

 

[NuJudge]

I could buy Lead shot for $18 per 25-pound bag last Christmas.

Lead shot reached $50 per bag this summer.

Lead shot is now down to $32 per bag around me.

The wheelweights I am getting now, they are still free.

CDD

 

[ilbob]

casters are going to sell for whatever they can get. if you don't like that, cast your own. the price of the raw materials is only one factor in the retail price of any product.

 

[kestak]

Greetings,

You wrote:"What really bothers me is that when things spike commodity wise, such as oil, the price of gas shoots upward inline with the ratio of oil barrel price increase."

This is not true. The gazonline proce increase was not a direct relation of the barrell of oil price increase. The price of a barrell of oil is just a variable in the function determining the cost of gazoline. This is the same with the price of bullets. For example, you must take into account to manufacture the bullets the price of energy too. Electricity price increase 7-8% in many states in just the last year.

Another example is the different tax increases we had: real estate taxe increased a lot because a lot of the properties value increased, income tax increased in 32 states out of the 50 (and not 57 like Obama said many times).

Thank you

 

[orionengnr]

The best thing everyone can do is STOP buying ammunition in hopes of the prices going down. This behavior will be what causes prices to drop.

Tht is what I was saying about fuel two years ago when those "Don't buy gas on a Monday" emails were going around. When demand for fuel goes down (as it has this year, 9.5-10% by US .gov sources) gas prices drop.

FWIW, I'm doing my part on the ammo front--the only loaded ammo I buy is either .22LR or SD ammo (and not much of the latter). The cast lead 200 gr SWC I started buying this Jan (when I started to buy components) for $28/500 quickly went to $35, the $42. No sign of a withdrawal yet.

 

[wep45]

bullets shouldn't be what they are priced

the "demand" part of the equation needs to be factored in. people are not shooting less. if they were then the manufacturers would have a surplus inventory and cut production and eventually price. this isnt going to happen.

people dont give up their pleasures so readily these days. live for today worry about tomorow, whenever.

 

[Glenn J]

I just read an article yesterday, that the reason the price of lead has gone so high, is because the chinese are buying all they can get. If you research it on the internet you should find the article. Glenn

 

[ants]

China sells lead, it doesn't buy it.

Go look at the global commodity markets, or look at any almanac listing net imports/exports.

Currently Europe is buying more lead than anyone else.

 

[ReloaderFred]

That used to be the case, but in the last couple of years China and India have both become consumers of both lead and copper. They are both trying to modernize at a rapid rate, and in China's case, they have become the battery manufacturers of the world.

Hope this helps.

Fred

 

[kestak]

Greetings,

ants, I am sorry but you are wrong. China is a net importer of all "primary" resources (minerals, petroleum, wood, etc) and a net exporter of "secondary" resources (finished products).

The last 3 years increase in all commodities is because largely of China "artificial" economics booms and secondary India. America also had an incredible run between 2003 and 2007 (contrary of what the maintream media says- but here we won't go into the nastinest of US politics. Those who doubt, just think about the tens of millions new homes built in the last 4 years that created now a surplus of homes...).

Anyway, an interesting site here: http://www.lme.co.uk/lead_industryusage.asp.
If you research on google, you find some very interesting information.

Thank you

 

[Remo-99]

China sells lead, it doesn't buy it.

I agree Ants China is/was a major exporter of minerals.
In the last decade, from a sudden growth in china's economy and much of their natural resources being depleted. They have made the switch from exporting to importing many raw materials.
If China's economy continues to grow over the next decade and they start to import Lead instead of export it, due to depletion of their own resources.
Watch the price climb again then.
But whether their economy can continue to grow in the current world climate remains to be seen.