Own purchase price or market price in the estimate?

What is a market reference for aluminium?

On 3 November 2026 the World Bank published its Pink Sheet, the monthly summary of commodity prices. For aluminium it carries the London Metal Exchange quotation for unalloyed primary aluminium in ingots, as an average in US dollars per tonne. October 2026 came in at USD 3,061 a tonne, September at USD 3,283.

A series like this is a market reference: a public price series with a source and a period, showing which way the market is moving. There are others. Eurostat publishes producer price indices, which track the monthly change in the selling price of industrial products, and the ECB publishes exchange rates. None of them is a price at which you can buy a kilo of material.

The aluminium series moves a good deal. The 2025 annual average stood at USD 2,632 a tonne and the second quarter of 2026 at USD 3,568, more than a third higher. From September to October 2026 the quotation fell by almost 7 per cent.

What goes into the price of a 6061 block?

Your supplier does not sell you an ingot. It sells you a block of EN AW-6061: alloyed, rolled or extruded, sawn to size and often with a material certificate. Every one of those steps sits in its price per kilo, along with its margin, the freight and the quantity you take.

That is why your own purchase price per kilo is a different price from the quotation, and not a fixed multiple of it either. A 50 mm plate, a Ø40 round bar and a block sawn to size from the same alloy each carry their own price per kilo, and each supplier sets a different one.

There is a currency in between as well. The Pink Sheet is in dollars; your supplier invoices in euros. The ECB publishes reference rates every working day and states that they are for information only and strongly discourages their use for transactions. A converted quotation is therefore still a reference.

Origin matters too. Aluminium is one of the sectors covered by the EU Carbon Border Adjustment Mechanism (CBAM). Its definitive regime has applied since 1 January 2026, and importers must buy certificates for the carbon emissions embedded in the goods they bring in. No quotation shows whether any of that reaches your supplier’s price per kilo, or how much. Ask when your material comes from outside the EU.

Which price belongs in the material line?

The estimate line for material takes your own purchase price: what your supplier charges for this material in this form, with the unit, the source and the price date attached. The source is the last purchase order, a written offer from the supplier or its price list. A material catalogue therefore holds that price per material and per form, not per alloy alone.

The line is costed on the stock, not on the finished part: the weight of the block times the price per kilo, plus sawing if that is charged separately. How large that block becomes, with allowance and clamping edge, is covered in the piece on sizing the blank.

When is a purchase price out of date?

A purchase price has a price date: the day it applied at your supplier, meaning the date of the purchase order or of the supplier’s written offer. Not the day someone typed it into the spreadsheet, which can be weeks later.

There are three moments to ask for a new price. The market reference has moved clearly since the price date. Your supplier sends a new price list or announces a surcharge. Or a repeat part comes back after a long gap, carrying a price per kilo from the previous order.

Without a price date none of those three can be checked. A price of €7.20 per kilo, as in the worked example, says little until you know whether it dates from last month or last year.

When you compare two written offers, set them side by side on the same price date, for the same form and on the same delivery terms. A price per kilo with freight and sawing included is a different price from a bare ex-warehouse price.

How do you use a market reference in an estimate?

Use it as a cue to ask for your own price again, and do not calculate with it. Between August and October 2026 the aluminium quotation in the Pink Sheet fell from USD 3,251 to USD 3,061 a tonne, almost 6 per cent. That does not mean the block in the worked example, at €7.20 a kilo, now costs €6.78.

Only the metal share of your price per kilo follows the quotation directly. Rolling, sawing, holding inventory, freight and your supplier’s margin move at their own pace, and only the supplier can say how large the metal share of its price is. Scale the whole price per kilo by the percentage the quotation moved and you move those costs with it, which overstates the fall or the rise.

If your supplier works with a surcharge or a price clause tied to a quotation, the case is different: your agreement then says which series counts and how. Record that agreement with the price, together with the series and the period.

What do you do when there is no purchase price?

Leave the line open and ask for the price. A material line at zero looks complete and pushes the cost too low. Converting the quotation to euros per kilo and filling that in pushes it too low as well, because an ingot is cheaper than a sawn block; it is just less obvious.

An open value is more honest: everyone can tell that a price is still missing before the quote goes out. The same holds for an outsourced operation, as set out in finishing without a price.

How do you explain a price change on a repeat part?

A customer reorders a repeat part after a year. The drawing has not changed, the price has, and inside sales gets asked why.

An ERP system stores the past: the order line and the selling price. It does not store the decision behind it: which price per kilo and which price date the estimate used. Copy last year’s quote and that old price per kilo comes along unnoticed. If material has gone up, you pay the difference out of your margin, on every part in the order.

With a source and a price date on every material price, the answer is specific: the last quote used the price per kilo of that time, on that date, and this one uses what your supplier charges now. The market reference over the same period shows which way the market went. Without the date it comes down to ‘material has gone up’, which is hard to defend to a buyer who follows the quotation too.