Foodservice Equipment Reports

Material Cost Increases Likely To Push E&S Prices Higher

A surge in prices for materials widely used in foodservice equipment and supplies likely will put pressure on foodservice equipment and supplies manufacturers to raise prices over the coming 12 months. Foodservice Equipment Reports Publisher Robin Ashton made that prediction during the magazine’s annual President’s Preview E&S Market Forecast meeting, held July 29 at the Westin O’Hare, Rosemont, Ill.

Thanks to a surge in nickel surcharges, the price of 304 stainless is up nearly 25% since January. Chromium, zinc, copper and aluminum prices are also on the rise. Forecasters are cautioning buyers to consider hedging all four materials, as the outlook is that prices could go yet higher.

A spike in prices for natural gas over the winter, combined with ethylene-refinery outages, has helped push the prices of many plastics resins up again this year. Many of the key resins are running 20%-30% higher than two years ago. While natural-gas prices have fallen since winter, the trend still is moving upward.

“E&S manufacturers will have some difficult pricing decisions to make in the coming months,” Ashton told attendees. “On the one hand, operators already feel squeezed by rising food and labor costs. On the other, materials prices are rising and not just a little. It will be an interesting few months as you consider pricing strategies for the coming year.”

The complete historical data and analysis of E&S materials pricing trends is available as part of FER’s 2015 E&S Market Forecast package. It can be purchased for $1,295. For information, email Robin Ashton at rashton@fermag.com.

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