Foodservice Equipment Reports

Commodity Prices Forecast To Continue Rising Into 2011

The trend of higher commodity prices will continue into 2011, according to Tom Stundza, senior principal analyst in the Pricing and Purchasing Group of IHS Global Insight. Stundza made the exclusive forecasts at FER’s President’s Preview E&S Market Forecast meeting in Evanston, Ill., earlier this month.

Noting that prices for most ferrous and nonferrous metals have risen between 20% and 40% since hitting cyclical lows in early summer ’09, Stundza said a combination of slowly improving global demand and supply disruptions have created the higher prices.

He predicted 304 stainless sheet prices will average $3,103 a ton this year, with the nickel surcharge, after bottoming out at $2,329 a ton last year. While he does not see a rapid run-up in stainless prices akin to the big jumps in ’05-’06 or ’08, he does expect continuing moderate increases in prices, with 304 averaging $3,400 a ton in ’11, a forecast 9.6% increase.

The patterns in carbon steels are similar. Hot-rolled sheet for example, is forecast to average $614 a ton in ’10, up from $471 a ton last year, and move moderately higher to a $660 a ton average in ’11.

Nickel has been the most volatile of the nonferrous metals, with prices jumping more than 40% since last year. The other key nonferrous metals--aluminum, copper and zinc-- are more closely tied to the construction and transportation markets, which remain depressed. Still, average price increases for the three have ranged between 24% for aluminum and 31% for copper. Stundza expects nickel prices to increase another 15% next year, while prices for aluminum, copper and zinc will remain flat, he predicts.

Energy prices are also forecast to move moderately higher next year.

Information on IHS Global Insight commodity pricing data and forecasts are available by e-mailing  Stundza’s presentation is available as part of the FER E&S Market Forecast package. See further details below.

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