Film Price Drop?

[Dave Wooten]

Silver, Platinum, Paladium prices are down......I was just wondering, thats all.

 

[Venchka]

Not yet. Unlike gasoline, film prices seem to be very sticky.

 

[Nigel]

Silver, Platinum, Paladium prices are down......I was just wondering, thats all.

Not to nit-pick (well, OK, it is nit picking) but I don't see where you suggested that the manufacturers raise prices as those commodities went up in price. Seems a little uneven to want a price decrease when you sought no price increase on the way up. And for what it is worth, oil/energy is probably a much bigger input cost than any of the metals.

But I suppose this is the nature of all consumers. If input prices rise, we expect the manufacturer to eat the difference, but if input prices fall, we want to see a discount.

As I have posted elsewhere on APUG, I do not begrudge manufacturers a price rise to ensure they remain profitable, as it ensures the availability of the product(s) into the future. For that matter, despite better pricing by mailorder, I continue to buy my film from one of my local pro-labs. That way, when I need a roll in a hurry, I have every reason to expect the film to be in stock.

 

[jp80874]

As amazing as Vegas is, I doubt that you can find 14"x 17" at the pro labs, on rolls no less. If so please send a roll here and have them split it out to 7x17 for me please.

John Powers

 

[Dave Wooten]

I have approached a local store about them possibly getting involved in the ULF programs. I mainly use Ilford film as I like the quality and choose to pay for it, and yes I have a nice supply of 14 x 17, 7 x 17 and 11 x 14 which will run quite low to zip by this summer. PLatinum has dropped dramatically, silver and gold are down, purchasing of most products are down. This could have an effect on alternative processes etc. Stillwater Mining in Montana is in dire straits (stock is around 2 bucks) as the cost to mine and produce an oz of platinum is getting pretty close. Silver is down and does not seem to be in short supply. The economy at present is historically quite interesting to say the least. I do not need to save a nickel or a buck to purchase the film I need. I choose to afford it. The question is to the cause and effect discussion...just wondering...thats all..... hoping there are those out there that might have a modicum more of market understanding than my feeble brain can comprehend. If cost to produce doesnt balance out with the purchase price then production stops and if demand goes up for what ever reason the price rises...? Thanks again all.

 

[railwayman3]

Most manufacturers using any form of "commodity" in their business (such as silver and precious metals in this case) will buy ahead by contracting now for their required supplies at fixed prices for delivery when needed in the future, maybe even one or two years in advance. In normal times, this enables them to plan their costs and pricing well ahead, and not be caught out by short-term fluctuations.

The present fall in prices may have been somewhat unexpected, so they could now be paying more than current prices under the existing "futures" contracts. It can work both ways, but it does provide some stability, so that prices of our photographic supplies don't move up-and-down with every little change in the market price of the basic materials.

 

[Dave Wooten]

Good point Railwayman,

Sort of like Southwest Airlines, was really kicking it when their long purchase of gas was below the sudden rise in price...now they are bound by it and present prices are below their contract price....

I find the remarkable drop in platinum prices more interesting than that of gold or silver...it is substantially more rare, and I dont think as recoverable (?) yet it is down by 1/2. Would one say an oz of platinum at 850.00 is a buy compared to an oz of gold at 750?

 

[wogster]

Not yet. Unlike gasoline, film prices seem to be very sticky.

There are usually 2 prices for any commodity, the market or spot price is for the casual investor, for example if you want to buy a 1 oz silver bar, you typically pay the spot price. However companies like Kodak, Fuji, Ilford, etc don't pay spot prices. They go to the metal processors and have long term contract prices, these prices have a lot less variability.

Say for example you have a company, XYZ Silver smelters, you buy ore from a mining company, the price is based more on the cost of extracting the ore from the ground and giving the mining company a reasonable profit. Now Kodak comes along and says we need 5 tons of silver a month, your going to look at your raw ore costs from the mines and your processing costs, add in a reasonable markup, and quote a price to Kodak. That price doesn't change no matter what the spot price is.

This applies just as much to oil as it does silver, what happens though with oil is that the oil companies know that people expect that the price goes up when the spot price of oil does, so they use that as opportunities to widen the spread, which is the difference between the price they pay and the price they charge. When the price drops, it never quite drops as much, which is why in the 1980's when oil was < $50/barrel, gas was 49 cents, and now it's over 80 cents even though the price of a barrel of oil is the same.

I sometimes wonder is whether it would be worth it, to collect up used fixer try to extract the silver from it. For one you could recycle the silver, second less environmental pollution.

 

[Dave Wooten]

Thanks Wogster, nice clarity!

In my past, the community college where I taught, the fixer was saved and we did have the silver picked up...can t remember the process involved.

 

[Photo Engineer]

Reminds me of song lyrics: "dream on, dream on.......".

Actually the price of the exotic organic chemicals used in films and the mundane chemicals used in processing have both skyrocketed in price due to the price of oil, and these impact heavily on the price of film and paper.

Also, the price of good materials for paper is going up.

Declining production also increases costs as does the concomitant idling of equipment and facilities.

PE

 

[Dave Wooten]

I notice Photographers Formulary has a 20% off sale going on, Platinum kits included.

 

[railwayman3]

I find the remarkable drop in platinum prices more interesting than that of gold or silver...it is substantially more rare, and I dont think as recoverable (?) yet it is down by 1/2. Would one say an oz of platinum at 850.00 is a buy compared to an oz of gold at 750?

It's only partly due to the rarity...it also depends on the demand for the metal at any particular time. Platinum does not have as many different uses in industry, jewelry, etc., as does silver or gold, and is not used in the same quantities.
I've not checked in any detail, but I see from a quick Google that one-third of newly-mined platinum goes into catalysts for automobile exhausts....seeing the slump in new car production right now, I guess that's a big fall in demand which would account for at least some of the drop in price.
Might be interesting to compare the fall in prices for gold, silver and platinum over the last 12 months on a percentage basis.

 

[Erwin Plau]

Isn't marketing costs what makes a film expensive? I believe that production costs are neglectible.

 

[Photo Engineer]

Isn't marketing costs what makes a film expensive? I believe that production costs are neglectible.

Production costs are only low at high volumes. As volume drops, production costs soar due to the huge inventory in perishable product and rare and pereishable chemicals.

A simple example is an IR sensitizing dye used for IR films. It might run $50,000 / kg and 1 kg would last 1 year at high volume production, but due to the perishable nature of the dye whether it is used or not, when production drops below the 1 kg/year level, dye begins to go bad before it is used up. And, IR film will not keep well even if frozen so unsold stock is waste.

Now, that is an extreme example, but selected to give you an idea of costs.

PE

 

[CBG]

Isn't marketing costs what makes a film expensive? I believe that production costs are neglectible.

Hmmm,

1. Marketing. Yeah sure, just up to a point. Just. But you have to add ...
2. Having a plant to make it in.
3. Having all the needed materials available.
4. Having trained people to make it.
5. Research to make a working production process.
6. Administration - someone's got to answer the phone, do bookkeeping, do payroll...
7. Sales force or whatever to get the word out and make contacts etc...
8. Transportation for the product.
9. Taxes, Insurance, Workers comp, a painful list of costs ...

Maybe if one ignores all the other costs of business, then, I suppose, the incremental cost of one roll of film is zip. I just don't buy that as a fair way to see the cost. It ignores too much.

But to answer your first question directly, I think not. I suspect that marketing is only a moderate cost when compared with the total cost of creating film.

C