It's a Nickel Crisis...
Dear Valued Customer:
Oh who am I kidding…. We all know what a “Dear Valued Customer" letter means…. I got bad news and I need to let you know ASAP!
The price of nickel has gone through the roof. Because of world events an already climbing nickel market skyrocketed this week, up over 235%!
I have attached 2 letters for you to review. The 1st (click here) announces the suspension of nickel trading on the London Metal Exchange on 3/8/2022. The price became that volatile. I never knew they did that to be honest.
The 2nd (click here) is a notification from our supplier of nickel and electroless nickel products letting us know that they are immediately implementing an emergency, daily nickel surcharge that will be based off the London Metal Exchange. Our price for the metal bearing electroless nickel components will be established on the day we purchase them. So long story short, nickel prices are unstable and volatile and that will impact TDF’s ability to hold prices and honor older prices and quotes.
Like our supplier of electroless nickel is doing to us, all orders in house or coming to us as of April 4th will be subject to a nickel surcharge. The amount of the nickel surcharge will be based on the price we pay for electroless nickel components on 4/4/2022. We have enough electroless nickel products in inventory to carry us until 4/4/2022. On that day we will order another months supply.
Based on our cost and the increase over our historical pricing, we will establish and hold that nickel surcharge until the following month, when we will purchase more product and establish a new nickel surcharge for May. As it states in the letter from our supplier, this will continue until the price off nickel comes back down to more typical levels. At that point they and we will eliminate the surcharge all together.
You will be able to track the surcharges and the factors used to calculate them, here on the web site. Each month we will post the LME price of nickel, the impact on what we are paying and the surcharge on our established pricing.
The numbers still need to be worked out and we are waiting for more information from our supplier but, we will be sure that you know our current surcharge based on the LME and at what price the surcharge will be eliminated. Again, the surcharge will be implemented on orders received after, or in house, on 4/4/2022
There is one more attachment that speaks to another key ingredient in electroless nickel plating. Back in January, the price for sodium hypophosphate increased dramatically, along with some other products we purchase. Our price for the electroless nickel component that this product is used in was increased substantially. At that time we did not increased our prices. And we are not including this as part of our newly established nickel surcharge. Click here for that attachment
But we thought it important for you to know that TDF is doing all it can to improve our internal processes and practices and not have to pass along every raw material increase. We will continue to look internally for solutions.
However, the increase in the cost of the nickel in electroless nickel solutions is just too great for us to absorb, overcome or improve our way around. This is a substantial and critical to the health of TDF surcharge that we are implementing, is absolutely necessary and is just good business.
I’m sure you have seen other increases for the metals and materials you are purchasing. At this point it seems we can assume that every product and raw material we purchase may be impacted at any time. Please feel free to inquire about any other jobs or processes that we offer you. There is no change to those prices now but, we are happy to discuss and share what we know if you have questions or opportunities you're concerned about.
We’ll continue to do our best for you, our valued customer.
& you are Valued Customers! Even if everybody hates to get those letters!
We appreciate your understanding! Please let me know if you’d like to discuss this, or any business issue you have, with me.
Thank you!
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