Prices on raw materials (China)

[WokkaWokka]

Good Morning,

Does anyone have a source of data on the Chinese raw materials market? I am looking mainly at steel.

I am importing fairly large volumes and at the moment since their RMB is slightly weaker and I need to set pricing for some of my larger accounts into 2020.

Last set of pricing I did was around $1.30 and if it goes to say $1.20 towards the end of Q1 2020 that could mean a large reduction in my margin.

You may be thinking, $1.20 are you mad?! but I need to work on a worst case scenario. Jan 2018 the market was at around $1.35, Jan 2019 was around $1.27 that is a 5.93% dip so really $1.20 is not beyond the realms of possibility. We have secured $1.25 on a forward contract to last until the end of January but then its after that the currency could hit us.

So really thoughts on the currency and if anyone knows raw material prices in China.

[foliedouce]

Can’t help with raw materials but we’re having similar conversations. Currently have a hedge at $1.3 and we are stress testing to parity.

I went out with an FX chap from a major investment bank this weekend and their predictions are:-

$1.4 soft Brexit / good deal
$1.2 hard Brexit

The above assume a Tory government

$1.1 any Brexit with a Corbyn government

It’s unnerving, can we have some stability please?

[WokkaWokka]

foliedouce said:

Can’t help with raw materials but we’re having similar conversations. Currently have a hedge at $1.3 and we are stress testing to parity.

I went out with an FX chap from a major investment bank this weekend and their predictions are:-

$1.4 soft Brexit / good deal
$1.2 hard Brexit

The above assume a Tory government

$1.1 any Brexit with a Corbyn government

It’s unnerving, can we have some stability please?

Would be great to get a good Brexit then we can have that stability the country needs saying that though our sales and profits have been up now for a long time so I want anything to make that continue.

I think I will probably base my figures around $1.20/$1.25 and we can go from there.

Its all a bit of a pain in the arse to be honest! The problem with the FX guys is even their predictions are pie in the sky it depends on what people like Boris, which could be anything. Barclays were saying it would be $1.50 before the end of the year at one stage and they were saying that to an acquaintance of mine worth in the region of 300M, pretty mad really!