Rising costs of carbon frames

Frame and Wheel posted a while ago about rising labor costs in China. This post referred to an article in the New York Times that described how workers in factories in China were increasingly in short supply and thus able to demand and receive higher wages. Frame and Wheel in conversation with suppliers in Asia was told that carbon fiber prices are on the way up in 2011 for this very reason. The explanation is that workers can find other jobs outside of factories or jobs in their home towns, which has created a supply shortage of labor in some of the manufacturing centers of China. Frame and Wheel notes that a strengthening Chinese currency against the US dollar and surging oil prices will drive up the prices of carbon fiber as well.

Item	2010 price	2011 price	% change in price
Frame	500	570.00	14
Fork	100	110.00	10
Headset	15	15.60	4
Expander	5	5.40	7
Total	620	701	13

Frame and Wheel was informed by its supplier of the following price increases for frame sets and related components. The price of a carbon fiber road frame and fork with headset and expander has increased about 13% to about $700. This increase is traditionally passed on to the bike brand, and from there passed on to the retailer who then passes it on to the customer. Some participants might absorb the price increases, but not much of it. Note that the largest increase is to the carbon frame. This is where most of the carbon is and most of the labor. The price of the frame increased 14% to $570 for 2011.