Issue link: https://iconnect007.uberflip.com/i/1476200
AUGUST 2022 I PCB007 MAGAZINE 29 that same load. But in our business, it's raw material-loaded. at means we feel it quicker than other people do. I can't comment exactly on what Ventec is doing, but certainly I know there are producers who are looking to buy contracts ahead, and future contracts right now are pricey. Matties: To that point, it's not just Ventec, but generally across the spectrum of materials. Fabricators must figure something out. Prices will be fluid, especially if it's a 90-day delivery window. Morgan: Yes, and that is something that peo- ple must get used to as well. It's quite common for us in the West to have fixed-price contracts, but those days are gone. By contrast, the Asian market is based on spot pricing far more than we've ever been in Europe and the West. e reason for that, of course, is that things change quite quickly. Everybody is trying to reason- ably pass on the cost increases they've gotten. I'm sure there might be some who want to take advantage of the position, but most of us have our heads down just trying to supply our cus- tomers. e customers who give us the best forecasts have the best chances because we can plan to some degree. We can't plan everything right now, but for the guys who expect stuff tomorrow, that is going to be a huge challenge for them. For those who spend time with their suppli- ers and start working on the supply chain, at Keep in mind that in the printed circuit board indus- try, the laminate manufac- turing industry has a pretty high percentage cost of raw materials in its product. Barry Matties: To your point, I think our energy costs are up 38% year-over-year. Morgan: Yes, and it's even higher in Europe, believe it or not. It's quite phenomenal. Even things like basic foodstuffs cost significantly more. Construction materials also. Timber prices for building in the UK has almost dou- bled in the last two years. Matties: In terms of pricing, that has needs to be dynamic and fluid. How is Ventec handling pricing? Morgan: e only responsible action is to ensure that selling prices reflect cost increases. Right now, it is important to secure the basic raw materials for the laminate industry and we have had to pay more for nearly everything. Looking back, crude oil was in the $10 a barrel range, but then for a long time it was $30 to $50 a barrel. We have been around $100 a barrel for a while now. It peaked at nearly $130 a barrel. is is important because oil is a basic source of many resins used in our industry. Copper is somewhat down from its all-time high earlier this year, however, the issues of supply chain migration to Asia and alternative markets such as EV battery production still loom large and increasing energy costs for conversion are a new threat to stability. Matties: Alun, as a raw material supplier, what forecast or expectations are you setting for your customers? Are you telling them to expect a range of, say, 10-30% increase until the end of the year? We all know it's going to increase. Morgan: I can't give you an exact percentage; it depends on the product. We will certainly pass on the best information that we have. Keep in mind that in the printed circuit board indus- try, the laminate manufacturing industry has a pretty high percentage cost of raw materi- als in its product. So, we are especially influ- enced. Silicon is another story; it doesn't carry