should be good news for ammo prices

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30 cal slob

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attached article is somewhat on topic.

copper is an important raw material for metallic cartridges (used in both the brass and bullet jacketing).

it's dropping like a brick in this post-credit bubble "stag-deflationary" environment.

might take a while for manufacturers to adjust prices to reflect lower raw material costs (there's always a lag). don't be running to wally world for that WWB party pack just yet.

when ammo prices do dip, i'd be stocking up, because this dip is likely going to be temporary, as money printing by the fed will prove to be inflationary over the long-run.

just my $0.02.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a3lbNuztWG9Q&refer=home#

Copper Heads for Biggest Drop in 21 Years as World Growth Slows


By Chanyaporn Chanjaroen

Dec. 31 (Bloomberg) -- Copper headed for its biggest annual drop in more than two decades in London trading. The metal pared its decline today on optimism governments will succeed in reviving economic growth next year.

Copper dropped 56 percent this year, the worst performance since at last 1987. The metal, which typically tracks industrial production, ranks 16 out of 19 commodities included in the Reuters/Jefferies CRB Index. Nickel, oil and gasoline did worse.

The Federal Reserve cut its benchmark interest rate this month to a range of zero to 0.25 percent for the first time and shifted its focus to debt purchases to revive the economy. Growth in the U.S., the second-biggest copper consumer after China, will be a negative 1 percent next year, compared with a 1.2 percent advance this year, a Bloomberg survey of economists showed.

“Things are going to be a lot better next year than a lot of people think,” said Lars Steffensen, founder and managing director of Ebullio Capital Management LLP, a commodity hedge fund based in Southend-On-Sea, U.K. “The U.S. is going to print the dollar to get out of the recession and anything tangible, like industrial metals, is going to be worth more.”

Copper for delivery in three months rose $45, or 1.5 percent, to $2,960 a metric ton as of 9:34 a.m. on the London Metal Exchange. The metal reached a record $8,940 on July 2. Futures for March rose 1.4 percent to $1.339 a pound in electronic trading on the Comex division of the New York Mercantile Exchange.

Copper producers or explorers were the four worst performers in the 162-member Bloomberg World Mining Index this year. Katanga Mining Ltd., which is restarting the Democratic Republic of Congo’s largest underground copper mine, fell 98 percent.

Economic Expansion

China’s economy expanded 9 percent in the third quarter, the slowest pace in five years. Industrial output grew the least since 1999 in November, exports fell for the first time in seven years and inflation was the weakest in almost two years, reports showed earlier this month.

Stockpiles of copper metal monitored by the LME have expanded to their biggest since February 2004. Including those monitored by bourses in Shanghai and New York, they have gained 64 percent this year. That’s equal to 7.5 days of global demand, from as low as 3.2 days in July.

Among other metals traded on the LME, aluminum increased $15, or 1 percent, to $1,510 a ton. Nickel advanced $220, or 2.1 percent, to $10,930 a ton and lead fell $10, or 1 percent, to $945 a ton. Zinc rose $27 to $1,177 a ton.

-- With reporting by Li Xiaowei in Shanghai, Bambang Dwi Djanuarto and Naila Firdausi in Jakarta, Keiko Ujikane and Tatsuo Ito in Tokyo. Editors: Stuart Wallace, M. Shankar

To contact the reporter on this story: Chanyaporn Chanjaroen in London at [email protected]

Last Updated: December 31, 2008 04:55 EST
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I doubt there will be a drop in price until there is a drop in demand. There will just be a larger profit for the manufacturer and the retail stores that can barely keep it on the shelves.
 
Besides most major companies buy futures contracts to hedge their bets, so six months ago, they may have bought all the copper that they needed for the next year thinking the prices would continue to spiral higher.

Someone with more economical sense will come along shortly and correct me, and that is fine.
 
Agreed, as long as there is high demand for ammo the prices will remain high. Ammo manufactures will just welcome the increase in savings of production materials but I doubt they are going to pass that on to the consumer. When the demand drops maybe then we'll start to see the prices come down.
 
You're correct, John828. It's the same deal as with the heating oil buyers and distributors in the northeast: Locked in to high prices compared to today's prices, from contracting during the time of higher prices to avoid paying even more if prices continued to rise.

The ammo folks are lucky that the demand is high enough to let them make sales at this time.

There may well be a dip, but commodity prices IMO will rise again within a year or two and ammo prices--along with everything else--will go back up.
 
Art,

Some of us didn't lock into high oil prices, we waited for the coming drop. :D

Maybe some of the ammo companies and suppliers are equally smart and lucky.
 
The price of metals has been dropping for 5 or 6 months. All the metals used in ammo is down approx 50 percent. Commodity prices will remain low for as long as the worldwide recession lasts. Ammo prices have dropped since the highs last summer. I'm seeing 9mm for $8 a box again. Since the metal used in the ammo you see on the shelf was probably bought 6 months ago it will take a while for the lower commodity prices to work their way through the system.
 
That is great news. It's doesn't seem like that long ago that I could go to Walmart and buy a 100rd value pack of 9mm for $8.88 and 100rd value pack of .45ACP for $11.88.

I haven't really target shot much at all recently, the ammo is just too pricey. I've even been picking up brass, which is something I never thought I would start doing.
 
The price will drop only if one or two manufacturers didn't lock into those high prices and offer ammo at lower prices to gain market share. If so, the other ammo manufacturers may have to lower prices to meet the competition, possibly taking a loss or little markup on those sales. That's what free market is all about.
 
Copper went from about $4/lb. a few months ago to about $1.50/lb. currently.

Don't expect ammo to follow the same percentage drop, ain't gonna' happen.
 
King, if one part of a function changes value, even though the other stays the same, the net result will still be different.

If raw material price goes down drastically, but demand stays roughly the same, the price of the end product will be negatively affected. Now with Comrade Obama about to take office we've seen a rush on guns and ammo. If the increased demand doesn't last, the price of ammo will come down. More people will continue to get into reloading as well, which will also have an effect on the price of factory ammunition.
 
King, just a friendly correction to your assertion, ok? No insult intended or flaming required. Someone earlier in this post mentioned Contracts and Futures. Case in point: I'm a Refiner and I'm buying my raw crude for $140 a barrel, and I mean buying it by the MILLIONS of barrels (as in Tanker loads) because the prices keep spiralling upward. Then, due to "world" demand, politics, or manipulation (like THAT never happens), the price suddenly tanks to $40 a barrel withing a couple of months, I'm sitting on a LOT of inventory that I have a HUGE amount of capitol invested in. I MUST regain that capital before I can reinvest it in more inventory and continue to produce my product. Therefore, despite the fact that crude is falling like a rock, pump prices will fall, but at a much slower rate while I recover my investment of "overpriced" crude. Now, consider that practically "every" refiner in the US is in the same boat (no pun intended), and pump prices will ALWAYS trail the decline in crude prices.
Now, reverse the trend: the crude prices are skyrocketing, and I must buy massive quantities today to preserve my ability to refine tomorrow. This is "supply and demand" and the increased demand of futures drives the prices higher and higher. My pump prices rise because I anticipate that my next contract purchase price will be even larger than the last one, and I have to have capital to purchase additional crude to continue my business. You get the idea? It's a vicious cyle, but it is what it is. WE (me included), as consumers, are unfortunately on the recieving end of this long, dry, shaft.
This same analogy and principal can be applied to ANYTHING that is produced for the consumer market. Sustitute lead, copper, or powder for crude oil and run the scenario. IT'S THE SAME OUTCOME. I don't like it either. So, STOP BUYING. And if you feel that stopping your cache' purchases isn't an option, then...... suck it up and pay the price. Just like WE all did when gas was $4 a gallon (or more). Questions?
 
It's NOT the Oil Companies that NECESSARILY 'control' the pump price. Remember, very few Refiners own their own production fields and therefore control the price they sell to themselves. You can thank the Feds for some of that. You ever hear of FERC rules and regulations? I work in the Energy Sector and it would boggle your mind the crap we have to to keep from tip-toeing over the damned FERC regulations (due primarily to ENRON, I might add). Some of our own employees can't even talk shop with a freind if he works for another subsidiary of the company because that conversation 'might' give unfair advantage in the marketplace. It is FREAKING incredible. So, please, please, please don't throw rocks at a house that you don't understand how it's built or what has to be done to keep it standing upright. There have, are, and probably will be crooks within this Industry, but who doesn't have them? Wall Street Banks, Mortgage Industry, Auto Manufacturers, ahhh, mmmm, the Government? Give me a break.
 
Oh yeah, in the above mentioned example of economics, I didn't mean LITERALLY that "I" am a refinery owner/operator who makes these 100 million dollar deals. God I wish!!!!! No, I'm just a regular guy working for a living to keep my family fed and have a little fun once in a while. And keeping my eyes open and focused on the world around me (as it seemingly is going to hell in a handbasket).
 
Those that are saying they doubt prices will drop why do people always say that,they said it about houses,they said it about gas,they say it about the recent "sellers market" in the Obama scare.

Copper is not just used for ammo,alot of copper is used for wiring and housing,and construction is plummeting.May take a while but I do believe there will be a drop,it is just that after someone is racking in a certain amount of money they are reluctant at first to admit that they need to lower price but they come around,just like the housing market where some refuse to believe that their house is dropping in value even though they know others are.
 
Check midwayusa, they just raised their prices 10% across the board for Ranier bullets, they've lost my business.
 
The wave was created and the ammo retailers are riding it in. The storm has passed though with calm seas but it'll take a while for the breakers to flatten.

In the meantime I'll just shoot my 22 and buy a box of x39 every now and then.
 
Raw material prices may have dropped, but since, oh.....say, November, demand has surged.

Prices are going to go nowhere but up for quite some time, IMO.
 
I doubt there will be a drop in price until there is a drop in demand. There will just be a larger profit for the manufacturer and the retail stores that can barely keep it on the shelves.
Click to expand...

Demand doesn't always dictate the price of goods. Look at gas, everyone was blaming demand due to China and India for high gas prices. It peaked at around $4.10 in my area, now it's down to $1.70. Did India and China suddenly stop using gas and oil? Don't think so. Demand is still high. Unless there was a surplus of oil that was suddenly dropped into the economy it was most likely the fact oil speculators dropped the price.

Not saying it doesn't apply in this situation, but there could be more factors than just supply and demand leading to high copper prices.
 
I've said it before, and I still believe it: Demand will drop once the current wave of panic buying and hoarding is over. The combination of rising ammo prices and the last election has put people in a "get it now while you still can" mode, which has driven demand up even in the face of rising prices. A lot of people are sitting on a goodly supply of ammo right now, and once they calm down and stop buying, that is, once they realize they've got enough ammo to last a while and there'll probably still be some to buy when that is gone, they'll stop buying and prices will come down.

Of course, I've been wrong before...
 
Did India and China suddenly stop using gas and oil? Don't think so. Demand is still high.
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Actually, you're wrong. Demand has dropped off, especially here in the US, who is the world's largest user of gas.

That's the main reason why OPEC is talking about production cuts, in order to shift the supply curve and increase demand which will allow them to increase prices.
 
Demand for oil has dropped for two reasons. When the price of gasoline rose to $4.00 people dramatically reduced their driving. Even through the price of gas has dropped people haven't returned to their old driving habits. But more importantly gasoline is only one part of oil consumption. Almost everything that is synthetic such as plastics and nylon is made out of oil. The worldwide recession has lowered demand for everything. Thousands of factories in China have gone out of business because no one in the U.S. is buying their products. That in turn means less oil is needed to make the plastic, less oil is needed to fuel the cargo ships, and less oil is needed to fuel the trucks that would have driven these nonexistent products to stores.
 
Demand for oil may have dropped off, but demand for ammo definitely has not dropped off. It seems like the coming administration is driving people to buy and store up ammo. So until the current panic is over, ammo prices won't be coming down.
 
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