Marmon Highway Technologies (MHT) companies will act immediately to deal with skyrocketing global metals prices, MHT President Kelly Dier announced recently. MHT companies will communicate with their respective customers about specific actions in response to the increase in metals prices.
Metals are the primary raw material in virtually all products supplied by MHT companies and constitute a high percentage of the total production cost. Since January 2008, metal prices have increased at previously unseen rates. Scrap prices alone increased $243 per ton or 88% in the first quarter. On April 1, scrap bundles sold at an increase of $155 per ton. Over the past several years, MHT companies have relentlessly applied lean operating principles throughout their businesses. These efforts have reduced production time from weeks to hours and minutes.
Until now, these continuous efficiency improvements have allowed MHT companies to absorb portions of the ongoing rise in metals prices. However, the escalation in metals prices now requires MHT companies to recover these costs and the additional expenses needed to support increased accounts receivable and inventory investment. Dier noted that if this unprecedented increase in metals prices proves to be speculation-driven, creating a pricing bubble, MHT companies will act quickly to make the appropriate adjustments.