Copper industry currently facing considerable cost increases

The copper industry is currently facing significant cost inflation. The reasons lie in a sharp increase in energy prices, CO2 certificate prices that have trebled, significantly higher freight rates and not least high wage increases in the Metals and Electrical Industries as a result of collective bargaining. Against this backdrop, MKM sees itself forced to pass on part of these cost increases to its customers.

The latest data from the Federal Association for Energy and Water Management (Bundesverband der deutschen Energie- und Wasserwirtschaft - BDEW) confirm what we have been seeing in Purchasing for months. Energy prices have risen dramatically. For the 2017 supply year, companies paid an average of around 30 euros for one megawatt hour of electricity, while in 2018 it was more than 50 euros. A fat rise of 66%. Fossil fuels such as coal and gas have also become appreciably more expensive. Not least, the price for CO2 certificates in emissions trading has more than trebled in the last twelve months. Higher toll costs from 1 January 2019 will add to the burden of freight rates which in any case have risen steeply. On 18 October 2018, the Bundestag passed an amendment to the German Federal Trunk Road Toll Act. According to the Bill, the new regulations are to generate additional revenues of 4.16 billion euros between 2019 and 2022. According to the latest information from road haulage companies, the toll increase of 7.0 cents will mean that vehicle costs for an average long-haul truck with 4 axles and a maximum permissible mass of more than 18 t will increase by 5.7% or almost € 9,000 per year.

Altogether, there are thus numerous individual factors beyond MKM’s control leading to considerable cost increases. MKM asks its customers, therefore, to appreciate the necessity for price adjustments.

 

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About KME:

With production facilities in Europe, Asia and the USA, KME SE is one of the world's largest manufacturers of copper and copper alloy products for innovative and intelligent product solutions. Sales are carried out via a worldwide sales network, tailored to the individual requirements of each customer. KME SE, owned by IntekGroup Spa, is managed by an European executive team. KME Mansfeld GmbH plays a significant role in KME's technological leadership in copper and brass semi-finished products. KME manufactures a comprehensive portfolio of wires, strips, tubes, rods and sheets at its Hettstedt site.