LOL... yes metals are commodities, commodities are what you see on the stock market, the numbers you see are what they are being traded for not sold for, there is a difference, chances are aluminum and magnesium and pipe steel suppliers for the power sport industry are not even registered with any stock exchange that's why manufactures get the metals so cheaply especially when they buy in big volume, and I do believe power sport companies around the globe do put a dent in the metal market.
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@me pours large mug of coffee, adopts pompous professorial tone or maybe that was incredulous satirical tone..)
If the average sled weighs 600 pounds and we assign all of that weight to just metals and multiply that times the total number of sleds produced in a year by all manufacturers (120,000 by generous estimates), the total weight in metals consumed is 72000000 pounds (72M pounds) or 36,000 Tons (36K Tons).
The global annual production of Steel last year was 1.6B (billion) Tons
The global annual production of Aluminum is 30M (million) Tons
The global annual product of Magnesium was 850K (thousand) Tons
So the total annual production of snowmobiles is .002% of the steel production OR .12% of the aluminum production OR 4% of the magnesium production if the entire sled was made completely out of each metal. They aren't and the by weight the amount of say magnesium in the sled is probably less than 2% of the total weight of the sled so 600*.02 or .08% of the total magnesium produced. The number is probably a lot lower than that at less than 1% but then I am just guessing at the percentage, the rest of the numbers above are fact. Anyhow, snowmobile manufacturing and even the total metal consumed by the combined manufacturers (inclusive of SxS and ATVs) you talk about isn't going to put a significant dent in the world metals market.
BTW Commodities are the way that prices are set, what is it that you think people are trading? Commodities Futures are contracts to purchase the future production of a resource (like metal or oil). You are in effect buying the goods (metal or oil) and take into account warehousing and rise or fall of availability. If you buy Oil commodities you (the buyer) actually contractually OWN that resource as a portion of the production housed in a registered warehouse and are making a bet that in x months (contract term) the price will go up, and your contract will be purchased at the spot price. When a company like Yamaha buys metal they buy it at the Commodity Spot price which is the then 'on the spot' price inclusive of warehousing and transportation at that specific point in time. Typically this will be ABOVE the Futures price. Either way the commodities price is the current or future price of the raw material. In reality, Yamaha probably rarely purchases the raw material, they purchased produced goods built by a subcontractor at the level of Yamaha Motors anyhow. The only time that you can break out of this is if you can make a multi-year purchase agreement for the raw materials. Even then, the supplier is going to look at you and the market and decide whether the bird in hand (Yamaha) is worth two in the bush (the market) and make a risk driven decision. With commodities you predict that demand is going to go up or down (mostly up) and would be EXTREMELY reticent to sign a multi-year deal and the price you would set for such a deal would probably be the middle ground of todays pricing, and a three year price on the open market, in other words, above todays spot price BECAUSE you KNOW that you can sell the contract to someone on the open market at a futures driven price.
Much like the commodity price on gold doesn't mean you pay for a ring by its weight, you have to pay for the production of that gold into a ring which by definition costs more than just the raw weight (commodity price of the gold). If you are telling me that you can buy gold (or any metal) at less than its commodity price for raw materials I will personally buy every ounce you can source as would anyone else because guess what, the world is buying at the commodities price. You do understand that what you buy on the stock market whether its commodities or shares is actual ownership...right... RIGHT?
A fun fact, there are 10000 shipping containers lost at sea every year, those shipping containers weigh about 8000 pounds each, that's 80M pounds of steel (empty container) lost at sea every year or the equivalent of the total consumed metals in the snowmobile industry (again, assuming that the entire sled is made of metal in this case steel).
Coffee done, I now return you to your normal daily soap opera (the snowmobile industry). Tom, last word from me on the subject.. back to purely sled talk....
