Metals, Steel, Aluminum & Coil Processing worked example

Metal Price Sensitivity at 110% unhedged portion of the buy: a worked example in metals, steel, aluminum & coil processing

Push unhedged portion of the buy up to 110% and the picture changes. This example computes every intermediate figure at that operating point. Use it when a metals buyer or estimator needs to size how a price swing flows through to total material cost on exposed tonnage.

The inputs for this scenario

  • Metal weight exposed to price swing: 200,000 lb (unchanged)
  • Price move per pound: 0.05 $ / lb (unchanged)
  • Unhedged portion of the buy: 110 % (raised for this scenario; the documented default is 100)
  • Fixed surcharge or contract adder: 0 $ (unchanged)

Working through the calculation

  • Applying the documented formula (Variable price impact = weight exposed × price change × unhedged share) to the inputs above produces each figure below.
  • At this operating point the engine returns 11,000 $ for total price impact, the number this scenario is built around.
  • At this operating point the engine returns 0.06 $ / piece for impact per pound.
  • At this operating point the engine returns 11,000 $ for variable price impact.
  • At this operating point the engine returns 0 $ for fixed cost adder.

How this compares with the baseline

  • Against the tool's baseline example, where unhedged portion of the buy sits at 100% and the headline result is 10,000 $, this scenario comes in 10% above the baseline at 11,000 $.
  • It multiplies the unhedged weight by the per-pound price change to get the variable dollar exposure, then adds any fixed surcharge to give a total price impact. The value of this scenario is the size of the gap it exposes: that gap, priced out over a year, is the budget you can justify spending to close it.

Results at a glance

  • Total price impact: 11,000 $ (headline result)
  • Impact per pound: 0.06 $ / piece
  • Variable price impact: 11,000 $
  • Fixed cost adder: 0 $

Run it with your numbers

  • Every input above is editable in the live Metal Price Sensitivity calculator, which recalculates instantly and can be shared with the inputs intact.

Last reviewed 2026-05-12.