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Loos HotWire: LoosCo.com's Blog

3 Factors that Drive Wire Costs

Dec 18, 2018 03:17 PM

If you order a small soda, you pay less than if you order a large soda. Then why if you buy a small wire are you paying more per pound than if you buy a large wire? What are the factors that determine this? Let’s take a look at the three largest contributors to wire costs and how they affect the price you pay.

Size/Diameter

The wire drawing process starts with a large diameter wire, or steel rod as it is known, and draws this material through dies to the desired thickness and characteristics. To make a wire smaller, you need to process it longer and use more labor and machine time to do so. As a wire gets smaller there are more actual feet per pound in the finished process, so the wire needs more time in each piece of equipment to reach its final size, or diameter. With this increased time, the cost of the processing overtakes the cost of the material and the price per lb processed increases faster than the reduction of material cost per unit decreases. In the end, the smaller the wire, the more per unit it costs to produce, and the higher the market price for that material.

Chemistry

wire-headerThe actual chemistry of the material has a large effect on the cost of finished wire products. Your base component in Ferrous metals is steel, with a myriad of alloying materials (additional metals and additives) affecting the performance of the product and the costs above raw steel to manufacture. With stainless steel and its alloys, the largest contributing materials are chrome and nickel, with nickel being the largest cost contributor. The market value of nickel drives the fluctuation of stainless pricing, and it often the sole reason why nickel alloys (such as Inconel® and Monel®) are priced much higher than the commercial stainless alloys. As alloys become more specialized in order to achieve industry specific performance requirements, special processing and specialty additives can also drive costs higher.

Tolerance

The tolerable ranges of both chemistry and physical characteristics (such as diameter and tensile strength) also contribute to costs. The wider the variation allowed in a process, the less expensive it is to run and the longer the process can be run without changing the manufacturing tooling. A broad chemistry range allows for more sources of supply and more competition. The broader the range of the diameter tolerance, the less often dies and other consumables need to be replaced and re-worked. In turn, this lowers the cost of manufacture and the price reflects these differences.

Conclusion

Size, Chemistry and Tolerance all have an impact on the final costing of a finished wire product. Whether it is commercial spring wire or fine medical catheter wire, the choices we make on performance specifications impact the ability to control the forces that drive prices. These statements are general and can vary from situation to situation, but the offer a bit of explanation of the interplay between design and manufacturing costs. If you have any questions about this or any wire related topics, don’t hesitate to contact us today.