MECHANICAL CONTRACTING


Back and to the future | PVF CURRENT TRENDS |


half the battle to seeing ahead; what was learned from this year and what to expect next. This year I saw pricing go lower


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than I imagined both in the numbers we used to bid, and, then again, from the vendors we bought. We are all desperate, and the end result is that none of us are really making much money; we are just surviving. However,


BY MARK PERRONE CONTRIBUTING WRITER


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for JC Cannistraro, we finished the year picking up a few projects. Going into next year, the future looks brighter than this time last year. With that being said, it doesn’t


take a brain surgeon to see that just about everything will be going up. This has been confirmed by the fact that I have received no less that 12 price increase notices within the last couple weeks. On top of the normal “copper tube is going out of sight,” I have seen increases in steel pipe, various valve manufactures, PVC, and soil pipe guys, etc. Obviously, we are at the bottom of the cycle and these guys have to start making a little money to survive, turn a profit, and have a little left over to invest in their future.


Copper tube Copper has become a commodity


(it has been for a long time); the price does not get set by its real value but what a bunch of traders decide is the best story. For the last five weeks copper has been screaming north as they feel there is more demand coming than the mines have. The Comex was at $4.25 the beginning of the week. Today the price was falling because someone (an expert, of course) said the debt in Europe was affecting it. I’m confused — did this guy miss the fact that the debt problem was here yesterday and price still was going up?! I had been reading that 90% of the inventories covered by the LME (London Metal Exchange) are owned by one company. That’s an awful lot of copper — made me think of the


s the holidays come and go, I always look back, and to the future. Knowing history is


Hunt Brothers back in the late 1970s who tried to bypass the Federal Reserve by cornering the world’s silver market and nearly touched off a global panic. In my “history” notes, copper


generally falls in the first quarter (a lot of times it bottoms out for the year). I still believe this will happen, I just don’t know how far. Come summer and the “construction season,” I think it will start to get pricey.


Steel pipe Lately steel has been pretty cheap;


however, I have noticed certain sizes go up as the lower priced inventories are used up. A few notices indicate increases have been received. It is the same old story: the cost of making steel exceeds the price they are getting. My theme this year is UP, and steel has been low so expect it to rise; I think it will be awhile before it gets going and won’t see much action until the third quarter.


Plastics PVC is up 20% today (at the time


this article was penned). I actually heard it was because of the petroleum market. PVC is manufactured from oil. I remember back during Katrina, PVC went through the roof because the oil wells went down in the gulf. But I think gas has been going up steadily this year and this is the first I have heard of a plastics increase. This could be another example of our


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e Circle 120 on reader reply


products being directed by commodities. The plastics we use for acid waste are up 8-10%. I guess they still haven’t made up for the


Copper [is] a


commodity; the price does not get set by its real value but by what a bunch of traders decide.


extended discounts we got last year as the market fell. I think both of these will rise all year long.


Flat steel I haven’t heard much on this front,


although we locked a bunch of jobs up for the year. This market is generally behind the steel pipe so I don’t see much action to late this year. Please remember that the results


above from the crystal ball are generated through a mixture of rumors, thoughts and conversations with various people in our industry (and out). But they are just that — no guarantees. Happy New Year!;


For nearly 30 years, Mark Perrone has been the material/purchasing manager for J.C. Cannistraro LLC, one of New England’s largest plumbing/HVAC/fire protection contractors. He specializes in procurement of miscellaneous material, including PVF, pipe supports, tools and equipment.


phc january 2011 www.phcnews.com


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