Estimating the cost of materials

[th3burningman]

We are trying to estimate the cost of materials.

For example, we use the American Metal Market, London Metal Exchange, and other sources to determine starting points for our material cost estimates. What I am struggling with is how to reasonably and accurately estimate the cost of, say, ductile iron vs. gray iron. In the AMM newsletters, they simply break the materials into various categories of scrap, but there must be a difference in cost for different compositions and alloys of common base materials. These differences are not reflected in any openly available source that I have found.

Just trying to brainstorm here. If anyone has any ideas please offer them up!

Thanks

 

[gerhardl]

Estimate the cost of materials for what purpose? What is the larger picture?

The real cost is always a combination of several factors: availability on the market, production cost, transportation cost, competition, scarcity, quality and lot size and skill in aquisition.

This is of course well known facts, and I apologize for reminding of this.

The point of my first question is that I believe you have two opinions:

A) Either ask one or several suppliers for material specified prices according to the 'price and purpose type' that you have, specified for amount and delivered for future time(s) if ordred today.

or

B) You indicate that you use standard issued lists. Ask one or several suppliers for percentage difference between published material lists and wished for materials.

In my opinion professional purchasing skill (if your target is aqusition) can contribute more than an accurate forcast to controlling costs. Depending on type of material and amount, discounts would probably have a fairly large variation from different suppliers to different customers.

You must of course have the material price prognosis available, but at what accuracy should you aim? Plus/minus 3% or plus/minus 10%?

See my point?

 

[adrianviorel]

Take into consideration AMM,LME prices are referring to important quantities, a lot of supplementary costs being added until the material reaches the end user. Right now, Mittal prices in Europe are somewhere in the range of 600 EUR/ton, for S235 JRG2. Any alloy element will raise the price ,as well as fine granulation will do (i.e. ASTM A516), SS plate being somewhere in the range of 6 EUR/kg. I wouldn't, still, bet on it, since SS market is very nervous, in both directions. The best way is to issue inquiries to your current suppliers. Be aware they could issue offers having validity of 1 day, only, due to the nervousness I have told you before.

 

[DavidMc]

Where is youre physical location? Is it pipe and fittings you are trying to price? I think I could help if you where to narrow you're general question down to specific items you are trying to price.