In this guide 6 sections
Quotes drift from cost because copper is bought days or weeks after it is priced. Fix this by recording the metal rate and its date on every quote, keeping a short validity period, and adding a price variation clause for long orders.
Where the gap between quote and cost opens
An estimator prices a transformer or a cable run on the copper rate of the day. The customer takes three weeks to decide. The purchase order lands, and the buyer orders copper at a different rate.
The difference falls straight on margin. A cable maker with a thin conversion margin feels it fast. Metal is most of its cost.
Transformer shops face a second twist. CRGO steel and copper move on different cycles, so a quote can be right on one and wrong on the other. Watch both.
- Quote date against purchase date
- Rod, strip or enamelled wire bought at different rates
- Aluminium or CRGO steel moving on its own cycle
- Scrap and wastage not priced in
Tie every quote to a dated metal rate
Write the rate used, its source and the date on the quote itself. Copper, aluminium and steel each get a line. Anyone reading the quote later sees what it assumed.
Separate the metal content from the conversion charge. Weight of copper per unit, times the rate, gives the metal part. Labour, overhead and testing form the rest. Now a rate change touches one number, not the whole price.
Add the scrap allowance from your own past jobs. Offcuts of strip, trimmed enamelled wire and rejected coils all carry metal you paid for. Leaving them out makes every quote look better than the shop floor can deliver.
Set a validity period that matches metal volatility
A quote that stays open for a month on a moving metal is a free option for the buyer. Shorten the validity on winding wire and strip. Longer validity needs a clause.
For large orders delivered in lots, use a price variation clause tied to a published reference rate. Agree the base rate, the base date and the way the adjustment is calculated before signing.
- Validity in days, stated on the quote
- Base rate and base date
- Published index used for adjustment
- Lots covered and lots excluded
Compare quoted metal cost with actual purchase
After each copper purchase, set the metal cost in the quote beside the invoice. A simple sheet by job shows the variance in rate, in weight and in wastage.
Variance in weight is its own signal. A winding that uses more copper than the design weight points to a process problem, not a market one. Separate the two causes so you chase the right one.
Ask which quotes won and which were lost. If you only win after the metal has risen, your quotes may be running too low. If you lose most, they may be padded for risk.
Hedge by buying, not by guessing
Where the order is confirmed, buy the copper at once or fix its price with the supplier for the full quantity. An open exposure is a bet you never meant to place.
Review open quotes weekly against today’s rate. Flag any that are now underwater. Start small. Add a metal rate field and a date field to your quote template.
Keep a log of the rate on the day each purchase order was placed. Over a quarter it shows how long your buying lags your pricing.
Quote metal rate sheet
A one page worksheet per quote. Rows list copper, aluminium and electrical steel. Columns show weight per unit, rate used, rate source, rate date, metal cost, conversion charge and validity days. A lower block compares quoted metal cost with purchased metal cost and records the variance.
Open a blank worksheet to printQuestions owners ask
Which copper rate should a quote use?
Use a published reference rate that your supplier also follows, and write its name and date on the quote. Consistency matters more than which index you pick.
Should metal cost sit as a separate line on the quote?
Internally, yes. Externally, it depends on the customer. A visible metal line makes a price variation clause easier to agree.
How do we handle quotes already sent?
Check them against the current rate. For those still open, send a revised quote or confirm the validity date in writing.
Can software track this?
Yes. Quotes can store the rate and date, and purchase records can be compared against them by job. A spreadsheet also works for small volumes.