As we’ve referenced in our previous article, in the summer of 2022, it’s still challenging to get drums, but how long will this continue? What will be the price of a 16.5”x7” drum at the end of the year? We’ll give you our predictions.
Brake drum pricing this year and last year has been driven by both an increase in cost and a shortage in supply. Recently, overall economic demand has been starting to cool. So, the cost of overseas freight and material prices has begun to reduce and is likely to continue to decline, thus reducing the landed cost of a brake drum to the customer. In addition, if overall economic demand continues to drop, demand for ocean freight, domestic freight, steel and diesel, and the premium for brake drums driven by the shortage will also reduce the selling price to the customer. If overall truck tonnage reduces, driven by a decreased economic demand, this will also minimize domestic freight costs and the overall market for aftermarket drums. As this happens, prices for drums coming from overseas will again be more economical than US-made products.
Class 8 truck orders appear to be at approximately half of last year. There is still limited production with ongoing supply chain issues, especially chips. However, truck manufacturers will catch up on their backlogs if orders continue to fall. On the other hand, trailer orders appear to be higher in 2022 than last year, propping up OEM brake drum demand.
Due to the above factors, we believe that the supply of brake drums will still be constrained until the end of the year, although not as severely as the market share of drums coming from overseas continues to grow. We might see overall price reductions of maybe 10% across the board for drums and rotors by the end of 2022. Until then, let’s continue to have fun!