MirkoBoeddecker
Dear members, :rolleyes:
Due to the skyrocketing prices of silver and basic chemical raw materials, unfortunately all market players are forced to recalculate their costs.
As competition among photographic manufacturers remains fierce, none of the players have any room for manoeuvre.
Foma has informed us in the attached letter that they will endeavour to continue offering their products at the lowest possible prices.
However, this also means that no long-term price quotes can be provided, as raw material prices change daily.
We must therefore be prepared for the possibility of short-term changes that do not apply across the entire range, but rather, for example, affect silver – primarily sheet film and roll film – rather than, or to a lesser extent, 35mm films.
It may also be the case that baryta paper becomes more expensive than PE etc., or that items still in stock with us are cheaper than those that have just been delivered.
In some cases, for example, the matt paper of the same size may be cheaper than the glossy version, and next week the prices may be back to normal.
We are doing our best to continue offering the best possible price, but given current trade margins, we have to pass on any increases from the manufacturers immediately.
We ask for your understanding. It is also not worth driving a manufacturer into ruin by pushing prices down.
I am aware of the raw material prices, energy costs and quality assurance costs. Foma really does offer its materials at very, very competitive prices. They earn virtually nothing from them (as their annual figures show).
Best regards,
Mirko
TeeGee
Sorry, double post – see below!
TeeGee
The price of silver has just fallen dramatically, so film prices should fall again too, or does it always work the other way round?
I (and others) am keen to hear the answer.
Dear all, :rolleyes:
Due to the explosion in raw material prices for silver and chemical raw materials, unfortunately everyone involved in the market is forced to recalculate their costs.
As competition among film manufacturers remains fierce, none of the players have any room for manoeuvre.
Foma has informed us in the attached letter that they will endeavour to continue offering their products as cheaply as possible.
However, this also means that no long-term price quotes can be provided, as raw material prices change daily.
We must therefore be prepared for the possibility of short-term changes that do not apply across the entire range, but rather, for example, to silver – primarily sheet film and roll film – and may not affect, or affect to a lesser extent, 35mm films.
It may also be the case that baryta paper becomes more expensive than PE etc., or that items still in stock with us are cheaper than those that have just been delivered.
In individual cases, for example, matt paper of the same size may be cheaper than the glossy version, and next week the prices may be adjusted again.
We are doing our best to continue offering the best possible price, but given current trade margins, we have to pass on any increases from manufacturers immediately.
We ask for your understanding. It is also not worth driving a manufacturer into ruin by pushing prices down.
I am aware of the raw material prices, energy costs and quality assurance costs. Foma really does offer its products at very, very competitive prices. They earn virtually nothing from them (as their annual figures clearly show).
Best regards,
Mirko
MirkoBoeddecker
The price of silver has risen by 65% since January and has now fallen by 25%.
It is taking longer and longer for changes in commodity prices to be fully reflected in the end-customer price.
With MCP, for example, we have just had to pass on the price adjustments from September production. The rolls cast four weeks ago at even higher costs are still in stock, have not yet been cut and have not yet been priced.
With MCC, we are still on the 2008 prices (but there are only a few weeks left until the last roll of old material is out of stock).
This means that the 65% or more increase in the price of silver over the last few months has often not yet reached the market at all.
In general, for example, there were hardly any price increases in the German market for paper until mid-2010.
So, even if the price falls rapidly, it is still possible that prices will continue to rise for a while, and the correction will only take effect in the market once all the raw materials purchased at less favourable terms have been used up.
If the silver price really does fall substantially from its long-term average – for example, back to the 2009 level on an annual average – then I would be very surprised if competition were to cease and no medium-term price reductions were to take place.
After all, one can sell more at lower prices, as customers do not suddenly have more money in their wallets to buy the same quantity at a higher price. Being able to sell two packs at a 15% profit is more attractive than one at 22% (this example isn’t a precise calculation based on the current situation and is merely illustrative).
In the short term, I hope this will at least mean there won’t be any further increases for the time being.
Best regards,
Mirko
TeeGee
Why the increase from 3.8p to 4.2p (an estimate based on statements from a few people who should know) in the silver content of the film leads to price rises of 50p per film, yet the price doesn’t seem to be going back the other way – likely due to the drastic fall in the price of silver – is something you’re welcome to try and explain again, Mirko.
MirkoBoeddecker
Why the rise from 3.8ct to 4.2ct (an estimate based on statements from a few people who should know) in the silver content of the film leads to price increases of 50ct per film, yet the price is unlikely to go back down again due to the drastic fall in the price of silver – you’re welcome to try and explain that again, Mirko.
We haven’t increased the price of any ADOX film.
Furthermore, I don’t consider these figures regarding the price of silver in film to be reliable, and I didn’t say that the price won’t fall again.
What exactly am I supposed to explain?
Mirko
TeeGee
As an insider, could you explain why companies such as Foma or Ilford are raising their prices so excessively, even though the silver price they cite as the reason does not justify such an increase, especially since the silver used in the films that have now become more expensive was purchased long before the price rise?
MirkoBoeddecker
What you’re saying isn’t quite right.
The price of silver has been rising sharply for the past two years. Initially, no price adjustments were made, as it was hoped the price would fall again. As it continued to rise, manufacturers had no choice, as there haven’t been any profit margins to share for years.
In principle, all analogue photographic products have been far too cheap for the past 10 years. The remaining manufacturers have been engaged in price wars, each hoping that another player would drop out.
Behind the scenes, it is not just about the retail price but also about production volumes. If a manufacturer achieves higher volumes on the production line, their set-up costs are reduced more significantly, allowing them to offer products at a much lower price.
However, if production volumes fall, costs may well rise sharply (depending on where we are on the efficiency scale of the respective production lines). Consequently, in recent years – regardless of the silver price – price adjustments have been far too modest (too modest compared to the cost increases resulting from falling demand, as everyone wanted to avoid risking even lower demand), and the contribution margin fell steadily until it had almost disappeared. If a variable cost factor now rises, manufacturers must react immediately and pass on these increases.
So much for the recent, hasty price increases, which were justified by the price of silver.
I have already said that price reductions are also possible in the event of a long-term decline. But we are not there yet. In that respect, I did not say that prices cannot go down again, although I do not necessarily wish for manufacturers to see prices return to their previous levels, as this will sooner or later lead to further withdrawal from the market (cf. Fuji at present).
I cannot comment on the example of the 0.4-cent cost increases due to rises in the price of silver, as I lack key figures. Neither was it clearly specified what kind of product is involved, nor which period of the rise in the silver price was considered. In the case of film, we have 8 grams of silver in one square metre of raw film. The web and packaging losses amount to approx. 10%, resulting in a calculated 8.80 grams for the end product. One troy ounce (around 31 grams) cost 49 USD at the peak price (= 1.58 USD per gram). A year ago, it stood at 17 USD and before that even lower. If we now compare the figures for the last year, this results in a price increase per gram from 0.55 USD to 1.58 USD.
Per square metre of raw film, this amounts to a price increase of USD 9 per square metre due solely to the rise in the price of silver. This corresponds to approximately EUR 6.20 per square metre. Applied to 35mm film, this results, for example, in a cost of 37 euro cents per film for standard films (and up to twice that for high-silver-content films) solely due to the silver. In any case, it is a significant cost factor.
For sheet films and photographic paper, this price increase has an even greater impact (although paper has a lower silver content, it also costs significantly less per square metre, so that the percentage share of silver in the production costs per square metre is not much lower in relative terms, and less packaging cost is included in the final price).
In my view, all price adjustments made so far have been rather moderate.
Best regards,
Mirko
TeeGee
Thanks for the information.
cfb_de
Hello Mirko,
The reasoning being put forward here is still not valid.
For one thing, in recent years we customers have been told on several occasions that price rises were due to a rise in the price of silver, even though the market price has actually fallen. Perhaps I’ll dig out some old catalogues this evening...
For another, thanks to what you’ve said, the price increase necessitated by the rise in the price of silver can now be calculated quite precisely to
bernhardmangelsgmxde
So... (I’ve just checked the prices) if we take the figures at face value and assume that the cost of silver per film in November ’10 was around 31 cents, then by April ’11 there wouldn’t have been a 6-cent increase, but rather a rise of roughly 30 cents to around 60 cents per film... if Mirko still had the October figures in mind back in November, that would also add up to an increase of 37 cents to around 68 cents.
if the price rose by 65% between January and April alone, that would also be significantly more than 6 cents...
Regards
Bernhard
sputnik
On 5 November 2010, you pointed out that the silver content of a KB film is around
MirkoBoeddecker
but rather the price increase solely due to the rise in the price of silver per film
Yes, of course. That is the amount of the pure increase. I deduce that from what I said earlier.
I have really tried to answer the question as best I can with the knowledge I have.
It should also be noted, of course, that the silver content varies across the different products.
In the case of films, it can be up to 12 grams per square metre. The 8 grams is an average figure for films up to 100 ASA that are produced using little silver (e.g. 25 ASA, T-Kristall or Delta films). 400 ASA films always require slightly more, as the grains are larger and the emulsion layer is therefore thicker.
It is therefore difficult to make a universally applicable statement. Manufacturers do not calculate everything for every single product either, but apply a flat-rate increase across product groups (otherwise, too much bureaucracy would again be factored into the end customer price...).
Best regards,
Mirko
