April 14th, 2010

Rise In Metals Prices Could Impact Shooting Market

metals raw materials bulletsExpect the price of bullets and cartridge brass to climb upwards. Though demand for loaded ammunition has slacked off somewhat in the USA, as the buying frenzy of 2008-2009 has abated, there is still strong demand for sporting ammo and reloading components. Shortages persist for some types of reloading components and military ammo demand remains strong. But the primary reason for higher brass and bullet prices is the rise in raw materials costs. In the past year, the price of copper has risen from about $2.00/lb to over $3.50/lb. Likewise, the cost of lead (used for bullet cores) has jumped from $0.60/lb to $1.05/lb.

Will this trend continue? Probably. As the world economy sputters into recovery, increased global demand for raw materials will probably continue to drive metal prices upwards — and that means reloading components will cost more. A 100-count box of 140gr bullets contains two pounds of metal. If raw material costs rise $2.00 or $3.00 per 100 bullets, eventually we will see higher bullet prices.

The Economist predicts rising metal prices through 2011: “Growing optimism about the world economy helps explain why prices are surging. News from developed economies has become sunnier. And metal-hungry China ([which] consumes a third of the world’s base metals) is expected to grow so fast that its metal demand could return to pre-crisis levels in a year or so. Supply and demand is not the only thing helping keep prices aloft. There is an ‘extraordinary market’ for copper that has departed from fundamentals, reckons Andrew Keen at HSBC. Growing copper inventories at metals-exchange warehouses (half a million tonnes or so by some estimates) have coincided with increasing prices. The same seems to be happening with aluminium, lead and nickel.”