Why does the price of brass raw materials have a significant impact on custom brass processed parts?

The reasons why the price of brass raw materials has a significant impact on the cost of custom-processed parts can be analyzed from the following key points:

1. The proportion of raw material costs is high
The cost of brass materials usually accounts for 30% to 70% of the total cost of custom parts (depending on the complexity of the process), especially in low-batch orders. For instance, the material cost for processing a brass gear may account for 50% of the quoted price, while in mass production, the proportion of equipment depreciation and labor costs will increase.

2. International metal price Linkage mechanism
For every 1% fluctuation in copper prices on the London Metal Exchange (LME), it leads to a change of approximately 0.6-0.8% in the cost of brass materials. In 2023, the copper price rose from $8,000 per ton to $9,500 per ton, directly pushing up the price of brass bars by 18%, resulting in an increase of 1,200 yuan per ton in the material cost of a certain batch of custom valve parts.

3. Economic levers for waste recycling
In precision machining, the material utilization rate is usually 60-85%, and the recycling value of the remaining chips is affected by the price of scrap copper on that day. When the purchase price of scrap copper dropped from 45 yuan per kilogram to 38 yuan per kilogram, the revenue per ton of processing waste decreased by 7,000 yuan, which is equivalent to an increase of 7% in hidden costs.

4. The price transmission cycle of the supply chain
Processing plants usually quote based on "material cost + processing fee", but the spot price of brass fluctuates by 0.5-1.2% every day. For orders delivered three months later, if no hedging is carried out, the risk of material price fluctuations shall be borne entirely by the processing party.

5. Special cost structure for customized production
The proportion of material preparation costs for small-batch orders (such as less than 100 pieces) is higher:
The material cutting loss rate increases by 5-8%
Minimum purchase quantity limit (if a whole 6-meter copper rod must be purchased)
Additional purchase of special alloys (such as leaded brass which needs to be melted separately)

6. Rigidity limitations of alternative materials
In specific fields such as bathrooms and ships, the corrosion resistance of brass is irreplaceable. When the price of materials increases by 20%, the choice flexibility of custom customers is almost zero, and they can only accept cost passing. In contrast, zinc alloys can be used for applications such as electronic product casings, but their performance will be compromised.

The cumulative effect of these factors makes the price of brass raw materials a core variable in the cost of custom processing. Experience shows that when the monthly fluctuation of copper prices exceeds 8%, processing enterprises usually need to activate the price adjustment mechanism; otherwise, they will face the risk of profit erosion. For the purchaser, choosing suppliers that adopt futures hedging or accepting the floating quotation clause is an effective strategy to deal with this risk.