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By | Paul Kunert 25th November 2011 14:51

Disk drive prices swell 5% every DAY in floods aftermath

Dealers accused of profiteering from Thai disaster

Price comparison site Idealo.co.uk has revealed that disk drive prices were rising by more than 5 per cent a day in the aftermath of the crisis in Thailand that sent supply chains into a tailspin.

The worst flooding in the country for more than half a century led to panic buying in the channel and subsequent accusations that vendors, distributors and resellers are profiteering on the back of the disaster.

Idealo.co.uk, which runs price-comparison portals, has tracked developments on its British, French and German pages, using the 10 best selling hard drives as the benchmark.

It claims that from the start of October to mid-November, the lowest average unit prices (AUPs) rocketed 151 per cent.

"The average price on 1 October lay at a slightly below average £43,29. By November 14, however, the average lowest price had increased to £109,78," Idealo told El Reg.

"The greatest price velocity occurred between October 18 and November 14, when prices increased at an average rate of 5.4 per cent per day," it added.

Drive shortages are expected to last throughout the year, according to Seagate boss Stephen Luczo, and WD – which has since worked with Thai navy divers in an effort to salvage equipment – says resuming production will be a multi-quarter challenge.

This is disaster of epic proportions, though some end users do view the price rises with cynicism amid concerns that distributors and etailers are using the shortages to dust off ageing kit sat in a warehouse and clear it for a better-than-expected return.

"Consumers are being fleeced by the 'shortage'. This is why consumers do not believe the prices will keep increasing when they can't trust the reasons that this is happening now," said a source.

The simple laws of economics – supply and demand – dictate that prices will rise in times of scarcity but clearly some resellers need to convince customers that movements are legit. Others will profiteer and sadly tarnish the channel. ®

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