Alumin(i)um and housing price

Andi at digideep has posted a very original article about how the price of Aluminium has nearly doubled in 2006, which may have a knock on effect on housing prices.

I am not sure how serious Andi is being with the article - but it is certainly one of the more unusual angles I have seen for an underwater photography article:

http://www.digideep.com/english/info/html/...housing-prices/

Alex

Interesting but while the raw material price has to come into the equation my guess would be that the other costs associated with short run manufacture of housings are dominant.

If you take a housing that retails at say £1000 the raw material price is still only a few pounds - doubling has not too much effect.

In recent times there has been large increases in the bulk price of Nickel which knocked on in the raw cost of Stainless steel and Tin has also been hit with the environmental move to lead free solders in the electronics world.

Now if you are into selling Aluminum foil - different matter, so buy in that turkey foil before Christmas (thanksgiving for the cousins).

Paul C

Andi at digideep has posted a very original article about how the price of Aluminium has nearly doubled in 2006, which may have a knock on effect on housing prices.

I don't think so! My Subal housing weighs 2.1kg and the aluminium price is around $2,650/tonne or $2.65/kilo. So there's about $5.60 worth of aluminium in my housing. Even if the aluminium price doubles that's only another $5.60.

Ok let's get this straight once and for all. The original word is Alumium then Davy changed it to Aluminum. Then somehow the brits added another i to get aluminium and being a big force in IUPAC pushed for the i to stay. A little trivia for the day.

I'm in the middle of a book. I just got the first pages to check and was dismayed to find that the sub-editor had mispelled lots of words. Then I noticed litres (liters) was changed to Cu.ft. I thought it was full of mistakes until I realised it was for the A-m-e-r-i-c-a-n market! So 14.7 lbs per sq inch for evey 33 feet...Do they really still use this stuff? Imagine my problem explaining to a non-diver that 12 litres translates to 80 cu.ft.!

By the way, why worry about alu... when helium is actually running out!

I don't think so! My Subal housing weighs 2.1kg and the aluminium price is around $2,650/tonne or $2.65/kilo. So there's about $5.60 worth of aluminium in my housing. Even if the aluminium price doubles that's only another $5.60.

The acutal material cost would be more, since aluminium housings are generally machined from a solid aluminium block. but still, the cost of aluminium is but a tiny portion of the cost of an underwater housing.

I don't think so! My Subal housing weighs 2.1kg and the aluminium price is around $2,650/tonne or $2.65/kilo. So there's about $5.60 worth of aluminium in my housing. Even if the aluminium price doubles that's only another $5.60.

That would be true if our housing makers bought only low grade aluminum and only by the ton, wasted none of the purchased metals in production and were able to produce these machined products without any unit fall-down. But it all depends on what grade, what shape, what sizes of shape, what total weight etc.

I imagine they buy higher grade aluminum than you find on a D90's doors and bonnet, buy it in much smaller (and resultingly higher priced) amounts, produce a lot of waste carving the respective housing's shape out of blocks and eat a fair amount of unit fall-down. I wouldn't think the alloy cost is a tremendously high percentage of the final price, but I'd have to think it is significantly more than US $ 10.00 per housing products.

I think you're missing the point that this isabout the increasing market price of aluminium driving the cost of housings up.

High quality aluminium is more expensive because you have to add other metals to the mix and perform additional processes to make it. Although the alloy will be much more expensive as a result the value of the actual aluminium content in the alloy remains unchanged.

Buying the aluminium in smaller batches makes it more expensive because of economies of scale and additional people in the supply chain taking their cut. These additional costs will be same no matter what the base cost of aluminium was in the first place.

Machining costs will be the same no matter what grade of aluminium you use. Waste aluminium from the machining process will not be thrown away, it will be recycled and much of the costs in procuring the material recouped in some way.

The market value of the aluminium in a housing is very small. It is all the other materials added, processes used in manufacture and various people in the supply chain from various raw materials to finished product taking their cut that makes them expensive.

I think you're missing the point that this isabout the increasing market price of aluminium driving the cost of housings up.

No I'm not I was responding specifically to the suggestion that the only cost the housing maker has for the materials in the housing are those materials which remain in the completed product, regardless of whether the issue is pure Al content or a 7000 series alloy. All the issues regarding falldown, waste and quantity/cost remain pertinent. That is why we cannot simply weigh our housings and take a worst-case extention of the cost as if it were made of pure Al, and then assume we understand the material cost for the final machined product.

As I said prior, I suspect the aluminum cost in a housing is significantly more than 10 bucks.

Hi everyone,

and thanks for rewarding my news-post with this active discussion. The speculations made here are very nice. Especially for the insignifcant ammount a housing weighs. You are all completely right on that, but the article was not ment as a late April fool.

In fact I got the idea of writing and researching the news after talking to a housing manufacturer. So it's not made up. My research revealed the illustrated increase in the stock market. Even though housing manufacturers use only little compared to other industries they might run into a supply problem. Spoken in economic terms they might even more easily run into a supply problem, than if they would consume more aluminium compared to other industries.

The fact that they need so little gives them less buyer power than other industries. If they cannot benefit from the purchase of related companies in a group they might not even get the metal at all. I experienced the same situation when I was a productmanager for ISDN-Telephones. They needed the same components as Nokia and Erricsson during the cell-phone market boom. The fact that we did not buy as much as Siemens or Nokia resulted in a situation of not getting any products out for several month on the "less interesting" corded-phone market. In the end smaller companies (as the one I worked for) had to buy from the big ones at ridiculus prices. For computer chips of a certain kind that was up to 10 times of the list-price. You should expect that housing companies are not in the position of buying as cheap as on the stock market.

Another fact you should consider is that Subal, Seacam, Sealux, Hugyfot... machine their housing (and sometimes also the ports) from a solid block that weighs much more than the housing itself. *** I just read that this was already mentioned above.

sidenote: your comments are also warmly welcome under the article

http://www.digideep.com/english/info/html/1282/