I just had an email exchange with an executive in the ammunition industry. It started out as a conversation on the rumors of the Russians stopping ammunition exports that we discussed yesterday, and then turned to discuss the market for 2014 and 2015.
Here are excerpts from that conversation he is allowing me to publish.
On Russian Ammo and ammunition demand in general:
My contacts have said there is a run on Russian caliber ammunition, 7.62×39 specifically. But, it seems to be in response to what is going on in Russia. Not because there has been a ban on export.
Just as with our current ammunition situation. Compounded by two contracted wars. An increase of gun ownership in the US by three fold since 06. Little to no increase production levels by manufacturers. We have seen a leveling of firearm purchasing. But ammunition demand is estimated to be about 17 billion rounds on the commercial side. That = 170 rounds a year per fire arms owner. I shot 200 yesterday. None of these numbers include, DoD, Federal, State, Local law enforcement. They are strictly commercial numbers.
On the “real issue” in the U.S. ammunition industry:
The real issue this year is the ”ongoing” powder shortage. It is going to be worse this year then the last two previous years. I have spoken to executives from the three major powder manufacturers in the US. And it is bad, I am talking really bad. I am not trying to scare anyone. Or cause an arbitrage in the market. I am simply telling you what I have been told. No manufacturers are taking new customers in 14 and possibly 15…
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