Wednesday, July 25, 2012 11:27:24 PM
Materion processes the 5 different elements:
1) buys at the FOB supplier of each element
2) adds in the freight of each element from supplier to Materion
3) must prepare an ingot of the 5 different elements in a vacuum melting environment to produce the requisite purity of the finished ingot required by customers like VPC.
4) adds in the processing fee and inventorying fee
5) adds in a mark-up or gross margin
So the actual cost of the ingot to VPC is probably going to be 1.5 to 2 times the cost of the raw materials.
So, to be safe, a one pound ingot will probably be a lot closer to costing VPC around $50.00.
Then, VPC has to build in the mold charge of, say $100,000 per mold, to each productive cycle.
then VPC has to add their mark-up for production.
I think my prices stand up when all of the cost factors are added in. It is always better to be on the high side, since the market price for elements changes monthly, if not weekly or daily.
We are on the same side.
I do like your calculations: Spot on. As long as we know they are for the purchase, FOB, of the individual elements, and not their combined or ingot cost. Thanks.
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