Purchasing articles from August 2008

Purchasing archives from August 2008

New twist on low-cost-country sourcing.
August 14, 2008... By Staff Purchasing's smartest negotiators move from conflict to collaboration fast. Match your wits against these pros. Guess their strategy. Then, read what they really did at purchasing.com/negotiations . Among possible solutions:...

Energy prices accelerate the move to the Middle East.
August 14, 2008... By David Hannon The longer natural gas and oil prices remain at record-highs domestically, the faster the chemicals supply base is moving to the Middle East. Some buyers were taken by surprise in June when Dow Chemical announced its...

PVC prices are inflating despite soft demand and overcapacity.(Polyvinyl chloride)
August 14, 2008... By Gordon Graff Demand for polyvinyl chloride (PVC) is off sharply this year as the housing and construction industries--the largest buyers for this plastic--have plunged in the U.S.. Meanwhile, a giant new PVC plant is about to open in...

Business Intelligence.
August 14, 2008... By Staff 35.3M Global demand (in metric tons) for PVC in 2007 Source: CMAI WHAT IT MEANS: Demand for PVC in the U.S. this year is expected to be off, as the housing and construction markets continues to slow. But PVC exports...

Feedstock concerns send ABS prices soaring to new highs.
August 14, 2008... By Gordon Graff Buyers of acrylonitrile-butadiene-styrene (ABS) plastic are finding supplies plentiful but increasingly expensive, a result of the costlier and scarcer feedstocks. While the zooming cost of crude oil is most responsible for...

Potash Corp. to expand production to meet high demand.
August 14, 2008... By Staff With demand for fertilizer products expanding in many global markets and potash prices rising, Canada's Potash Corp. of Saskatchewan has unveiled plans to expand its capacity by 2.7 million metric tons/year by 2012. The $1.6...

Distributors see growth in defense industry.
August 14, 2008... By James Carbone As electronics manufacturing services (EMS) providers handle more printed circuit board assembly from defense contractors (see story p 24E9), many are using electronics distributors as a source for parts and value-added...

Defense is forcing new EMS tactics.(Electronics manufacturing services)
August 14, 2008... By James Carbone Buying for defense systems is different than buying for other industries as purchase volumes are low, quality requirements are high and lifecycles are long. Since the 2001 electronics industry downturn, most major and...

Some connector prices will rise.
August 14, 2008... By Gina Roos Continued increases in costs for metals and resins are impacting the connector industry and will result in price hikes for some interconnect products. "Raw materials cost is the biggest issue," says Mike O'Connell,...

Business Intelligence.
August 14, 2008... By James Carbone 59% Electronics purchasers who report stable semiconductor prices in July Source: www.purchasingdata.com WHAT IT MEANS: Despite higher raw materials costs, increasing competition among suppliers is keeping...

New charges lodged against Intel.(Intel Corp.)(Brief article)
August 14, 2008... By James Carbone The European Commission has made new charges against Intel that the chipmaker paid retailers to not sell computers that used microprocessors made by Advanced Micro Devices (AMD). The new charges follow allegations made...

Distribution Briefs.
August 14, 2008... By James Carbone Allied to distribute AIM Solder Products Allied Electronics of Fort Worth, Texas, has signed an agreement with AIM Solder, a global manufacturer of solder assembly materials, to distribute solder products. Allied...

Chip equipment spending drops.(Brief article)
August 14, 2008... By James Carbone Worldwide capital spending for semiconductor equipment will drop 22.4% in 2008 because of continued economic uncertainty and weakness in the memory IC market. That will likely mean tighter chip supply next year. ...

Buyers can expect more price declines for LEDs despite robust demand.
August 14, 2008... By James Carbone Buyers can expect continued price declines for high-brightness light emitting diodes (LEDs), despite strong unit demand growth, as LEDs are designed into everything from cell phones to ceiling lights. Prices will drop...

Chip R&D spending grows in first quarter.(Brief article)
August 14, 2008... By James Carbone Worldwide spending on semiconductor research and development (R&D) grew 12% in the first quarter of 2008 compared to the first quarter of 2007, according to researcher IC Insights. Semiconductor R&D amounted to $10...

Prices.
August 14, 2008... Staff Buyers are paying more for just about every- thing (National, recent price trends) -------------------------------------------- UP DOWN SAME INDEX Energy 91% 2% 7% 95.0...

Rails May Stifle Trucks.(Brief article)
August 14, 2008... Staff The higher the cost of diesel fuel, the more price-competitive that rail is versus truck, says analyst Randy Cousins at BMO Capital Markets. That's why he believes such railroads as the Norfolk Southern "have the greatest opportunity...

Heat Transfer Fluids Up.(Solutia has raising delivery prices)(Brief article)
August 14, 2008... Staff Chemical maker Solutia has raised August-delivery prices by 25% on heat transfer fluid products to offset rising energy and raw material costs. These fluids are used for the indirect transfer of process heat in heating and air...

Fundamentals Boost Oil.(Brief article)
August 14, 2008... Staff A federal task force--which included the Commodity Futures Trading Commission, the Federal Reserve, the Treasury and other government agencies--has cleared market speculators suspected of driving up the price of oil. The research...

Kimberly-Clark Sees Hikes.(Brief article)
August 14, 2008... Staff Kimberly-Clark has warned that it likely will make a series of price increases over the coming months to offset "unprecedented increases" in its costs of oil, natural gas and wood pulp. CEO Tom Falk tells analysts and investors that...

Natgas Will Stay Elevated.(Brief article)
August 14, 2008... Staff Don't count on a break in natural gas prices. Economists look for the average annual price to be $11 per million British thermal units (BTUs) this year. This compares with the $6 annual average in 2006 and 2007. Note that production...

Fuel Taxes May Go Higher.(Brief article)
August 14, 2008... Staff Washington is considering a 10Ao/gallon increase on fuel taxes on diesel, which now are 24.3Ao. The suggested increase is due to a report from the construction industry that a shortfall in highway spending could result in thousands...

More Coal Inflation In '09.(Brief article)
August 14, 2008... Staff Thermal coal isn't as available as it used to be, so the price has skyrocketed. It was selling for under $50/metric ton just a few years ago and is now $200. There are forecast of $250 thermal coal in 2009. Why? Because expectations...

Economy + Supply.
August 14, 2008... By Staff Buying-plans slowdown reflects vacation days (National, buying plans, 30-days) -------------------------------------------- UP DOWN SAME INDEX Transportation 19% 19% 62% 50.2...

Economy + Supply.
August 14, 2008... Staff Buying-plans slowdown reflects vacation days (National, buying plans, 30-days) -------------------------------------------- UP DOWN SAME INDEX Transportation 19% 19% 62% 50.2...

45%.
August 14, 2008... Staff Percent of economists in a recent National Association for Business Economics survey that believe the economy won't log any growth or will clock in at a feeble 1% pace in the final six months of this year. Another 10% think economic...

Flat Output Predicted.(manufacturing industries)(Financial report)(Brief article)
August 14, 2008... Staff The manufacturing sector is expected to face significant challenges in the near-term, according to the quarterly Manufacturers Alliance/MAPI latest quarterly survey. The June composite index registered a drop to 50 from 57 reported...

Fed: Inflation Too High.(Brief article)
August 14, 2008... Staff The economy is growing "at a solid pace" outside of housing and manufacturing, but a key inflation measure remains "uncomfortably high," says Federal Reserve Board Chairman Ben Bernanke. In fact, he tells House and Senate...

Nonferrous Could Slide.(Brief article)
August 14, 2008... Staff A growing number of analysts are projecting lower prices in 2009 for such commodities as copper, nickel, lead and zinc after the spikes of the past two years. No so, for aluminum. Production downturns in Australia, China and South...

Economic Activity is Off.(Brief article)
August 14, 2008... Staff The country has slogged through slower economic growth and rising prices during the early summer, packing a double whammy to people and businesses alike. So says the Fed's mid-July snapshot of business conditions from its dozen...

China will Stay Busy.(Brief article)
August 14, 2008... Staff Wonder how long China will continue to buy so much energy and raw materials that supply is tight and prices are high? Read this: New research from the McKinsey Global Institute projects that China's urban population is likely to grow...

Auto Sales are Falling.(Financial report)(Brief article)
August 14, 2008... Staff Analysts have reduced U.S. automotive sales expectations for this year. Deutsche Bank analyst Rod Lache agrees with General Motors that 2008 auto sales will be 14 million vehicles, down from 16.15 million in 2007. The Renault-Nissan...

Diesel Drives Platinum.(Brief article)
August 14, 2008... Staff As gas prices continue to escalate and more carmakers look at diesel technologies, demand for platinum will increase, says analyst James Moore at TheBullionDesk.com .. "Emission controls are getting tighter and tighter," he says,...

Costs Impact 'the Cat'.(Caterpillar Inc. expecting raw material costs to grow)(Brief article)
August 14, 2008... Staff Caterpillar now expects raw material costs to swell 2.5-3% this year as a result of higher prices for steel and other commodities. Such a percentage increase is $550 million to $660 million in non-budgeted material costs for the...

Hynix Shuts U. S. Plant.(Hynix Semiconductor Inc.)(Brief article)
August 14, 2008... Staff Hynix Semiconductor, the world's second-largest memory chip maker, will close its only U.S. factory, a 10-year-old plant in Eugene, Ore., by the end of September due to changes in production standards and steep price declines...

Unemployment Claims Surge.(Brief article)
August 14, 2008... Staff The number of newly laid off people filing claims for unemployment benefits bolted past 400,000 in late July as companies trimmed their work forces to cope with a slowing economy and fallout from a collapsed housing market.. Labor...

Zinc May Tighten A Bit.(Brief article)
August 14, 2008... Staff Zinc supply is in excess worldwide but it could tighten slightly this summer when Teck Cominco and Xstrata close their joint-venture Lennard Shelf Pillara zinc mine in Western Australia earlier than planned--due to the continuing...

AK Steel to Slow Output.(AK Steel Corp.)(Brief article)
August 14, 2008... Staff Flat-rolled steelmaker AK Steel is forecasting slower seasonal third-quarter shipments, compounded by the still-slumping automotive and appliance market. At the same time, hot-rolled sheet prices appear to have plateaued. So, the...

Arcelor Mittal Buys Coal Firms.(Concept Group)(Mid Vol Coal Group)(Brief article)
August 14, 2008... Staff Arcelor Mittal has purchased two U.S. metallurgical coal miners as it expands ownership of steel raw materials amid rising costs. The purchased firms are Concept Group and Mid Vol Coal Group both in southern West Virginia. The...

Steel Beams Not Certain.(Brief article)
August 14, 2008... Staff Nucor, Steel Dynamics and Gerdau Ameristeel have increased scrap-related surcharges on wide-flange beam products for August deliveries. This action brings the mill price for medium-sized wide-flange beams around $1,152/ton. But, the...

RV Maker Downsizes.(Monaco Coach Corp.)(Brief article)
August 14, 2008... Staff Monaco Coach will close three northern Indiana factories and eliminate 1,400 jobs, or about a third of its work force, because of the slumping economy and the shrinking market for recreational vehicles. CEO Kay Toolson of the Coburg,...

Steel Expectations Dip.(Brief article)
August 14, 2008... Staff With world steel demand in a summertime swoon, the latest market survey by SteelBusinessBriefing.com shows buyers worldwide expecting lower transaction prices through October. The latest Purchasingdata.com survey also finds fewer...

Oxea Sets Freight Charges.(Brief article)
August 14, 2008... Staff Dallas-based chemical supplier Oxea USA boosted market prices for solvents this summer and then implemented a fuel surcharge of $300 per truck shipments and $600 per rail shipments in North America. The company says the surcharge...

Polystyrene Moves Higher.(Brief article)
August 14, 2008... Staff Producers boosted list prices for general purpose polystyrene in July to a high end of a range at $1.06/lb, blaming the 7Ao cost-push action on higher natural gas and chemical (styrene and ethylene) costs. However, Purchasingdata.com...

Plate Prices Strengthen.(Brief article)
August 14, 2008... Staff Tight supplies of steel plate and rising scrap costs for producers look to translate into substantially higher prices by late summer. The July average price for spot buys of cut-to-length steel plate of $1,360/ton was 73% higher than...

Aluminum Heads Higher.(Brief article)
August 14, 2008... Staff Aluminum market analysts are falling in line with $2/lb price forecasts for world ingot in 2009 now that China, the world's biggest producer and user, has reduced smelting rates because of power shortages. The action will make China...

Dow Chemical Spins Wheels.(Financial report)(Brief article)
August 14, 2008... Staff Despite two double-digit price increases unveiled in the second quarter that reverberated throughout the petrochemical marketplace, Dow Chemical's profit for the April-June period fell 27%. Reason: Sharply higher costs for energy and...

Chip prices will be Flat--and then Rise.
August 14, 2008... By James Carbone Despite growing demand, prices for many semiconductors will drop this year as fabs are running all out and extra capacity is not being added. But 2009 and beyond will be a different story. Demand for semiconductors in...

Suppliers target profitability.
August 14, 2008... By James Carbone Semiconductor price wars are over, and connector suppliers will try to recoup higher materials costs. Buyers can expect to see an attitude adjustment on the part of semiconductor suppliers. In fact, if they look...

Prices will stay high for metals.
August 14, 2008... By Tom Stundza Metals prices have taken a big jump up this year and the price hikes aren't over. But, next year will be a different story. After erupting by 26% in 2007, prices this year for a group of metals tracked by...

Tight supplies fuel 'supercycle' costs.
August 14, 2008... By Tom Stundza Under-investment in mining capacity is one of the reasons behind the current price inflation. Metals prices overall now are in the seventh year of a bull-pricing phase, a so-called supercycle, that actually started in...

Seven ways to track metals-pricing trends.
August 14, 2008... By Tom Stundza A little research and reading can give you a heads up on which direction prices may go. The long-term price outlook remains bullish for commodity materials because of the economic booms in China and other emerging...

DHL-UPS deal shakes up the small parcel market.
August 14, 2008... By David Hannon The decision by Deutsche Post to restructure its DHL U.S. Express business by "outsourcing" its air freight shipments to rival UPS and cutting back its ground network (Purchasing , July 2008, p. 28) has some logistics...

Business Intelligence.
August 14, 2008... By David Hannon 32.5% Fuel surcharge on FedEx and UPS air/express shipments in July Source: FedEx, UPS WHAT IT MEANS: Keep it on the ground when you can. With jet fuel prices skyrocketing up to nearly $4/gallon, the...

Fuel trumps base rates.(Brief article)
August 14, 2008... By David Hannon As fuel costs continue to skyrocket, several shippers say small parcel base rates are less of an issue than managing fuel surcharges. "With fuel surcharges at 28%, carriers simply can't lower their rates enough to...

CSX: Exports drive rail demand, rates.(Financial report)(Brief article)
August 14, 2008... By David Hannon Rail provider CSX says in its quarterly earnings report that demand for coal and grain exports from the U.S. drove its rates up 3% in the second quarter, enough to offset declines in volumes in other areas, notably...

STB forces CSX to drop "unreasonably high" rail rates.(Surface Transportation Board)
August 14, 2008... By David Hannon Score one for the captive shippers. The Surface Transportation Board issued a decision in June ordering railroad provider CSX to reduce the rates it was charging chemicals maker DuPont to carry plasticizers and plastic...

Another LTL carrier closes its doors.(Alvan Motor Freight Inc.)(Brief article)
August 14, 2008... By David Hannon Alvan Motor Freight had seen a lot of market trends in its 67 years of operations as a less-than-truckload carrier based in Kalamazoo, Mich. But the latest "perfect storm" of declining trucking demand, record high fuel...

Demand continues to fly above the turbulence.
August 14, 2008... By Tom Stundza A multiyear upswing in demand is expected as airlines worldwide build capacity of fuel-efficient planes to accommodate future airline traffic growth. Even as airlines struggle with the skyrocketing cost of jet fuel, the...

Reduced purchasing in 2008 may just be a bump in the road.
August 14, 2008... By Tom Stundza Purchasing of titanium is stagnating this year, even with prices off somewhat from year-ago levels, mostly because of delays in constructing Boeing's next-generation 787 jet and Airbus'A380. However, purchasing of titanium...

ArcelorMittal invests in special solar cells.
August 14, 2008... By Tom Stundza Steelmaking giant ArcelorMittal is investing $20 million in Miasole of Santa Clara, Calif., a developer of thin-film copper-indium-galium-selenium (or CIGS) solar cells. This is a competitive technology to solar cells made...

Cleveland-Cliffs, Alpha merger creates pellet supply leader.(Brief article)
August 14, 2008... By Tom Stundza The $10 billion merger of Cleveland-Cliffs and Alpha Natural Resources has created a mining giant that now is the leading North American iron ore pellet producer and the largest U.S. producer of metallurgical coal used in...

AK Steel expands electrical steel; fourth investment this year.(Brief article)
August 14, 2008... By Tom Stundza Directors of AK Steel approved a $21 million capital investment expansion at the Butler, Pa., steel works to boost production capabilities for grain-oriented electrical steels that currently are in strong demand in both U.S....

Rebar costs clobber construction.(Brief article)
August 14, 2008... By Tom Stundza Soaring prices of concrete reinforcing bar (steel rebar) used in the construction of highways, bridges and commercial buildings "are clobbering construction budgets," comments Ken Simonson, chief economist for the Associated...

Can-recycling rate at 53.8% in 2007.(Brief article)
August 14, 2008... By Tom Stundza The U.S. aluminum can-recycling rate increased to 53.8% in 2007, the highest recycling rate in six years, from 51.6% in 2006, according to the joint annual update from the Aluminum Association, Can Manufacturers Institute...

Business Intelligence.
August 14, 2008... By Tom Stundza $1.10/lb Revised U.S. outlook for zinc Source: BMO Capital Markets WHAT IT MEANS: There's just too much zinc. The International Lead Zinc Study Group projects a zinc surplus this year of 215,000 metric tons....

Russia also is a big aerospace supplier.(VSMPO-AVISMA to supply titanium products to Airbus and its components subcontractors )(Brief article)
August 14, 2008... By Tom Stundza Russian titanium maker VSMPO-AVISMA has agreed to supply of $4 billion worth titanium products to Airbus and its components subcontractors through 2020. Airbus has been buying titanium from VSMPO-AVISMA since the early 1990s...

Pace CEO is looking for die-cast bookings.(Scott Bull CEO of Pace Industries Inc)(Brief article)
August 14, 2008... By Tom Stundza Diversified manufacturer Leggett & Platt has sold its aluminum die-casting unit to New York-based private equity firm Kenner & Company, which has decided to rename the aluminum, magnesium and zinc group to its previous name...

Light metal prices will increase to $2/lb as China slashes output.
August 14, 2008... By Tom Stundza World aluminum prices could advance by as much as 50% more through 2009 now that China's top 20 aluminum producers are cutting output by 10% to save energy and help that country cope with power outages. Monthly sales prices...

Coppermetals shipments sliding by 4%.(Brief article)
August 14, 2008... By Tom Stundza Service centers' shipments of copper and copper alloy products declined by 6% in May from April and dropped 10.2% from the same month as year earlier. Copper products shipments were down 4.3%, while alloy shipments were off...

Summer doldrums for steel, aluminum in U.S., Canada.(Brief article)
August 14, 2008... By Tom Stundza The ongoing deterioration of the North American economy added to seasonal and cyclical weakness for metals shipments in June, according to the latest metals activity report from the Metals Service Center Institute. The...

Metals Chips.
August 14, 2008... By Tom Stundza Algoma Steel in Sault Ste. Marie, Ont., is gone, replaced with Essar Steel Algoma to reflect the company's purchase by Essar Group of India for $1.82 billion in June 2007. Chatham Steel Corp. is looking to build its...

IISI: Production increased 5.9% in June; midyear output is up 5.7%.
August 14, 2008... By Tom Stundza World crude steel production was 118.8 million metric tons in June, according to the International Iron and Steel Institute, which was 5.9% higher than the same month in 2007. Total world crude steel production was 696...

MRO buyers: Price should not be deciding factor in the RFQ process.(request for quotation)
August 14, 2008... By Susan Avery As purchasing professionals who take a strategic approach to the maintenance, repair and operations (MRO) buy know, price should not be the determining factor in the supplier selection decision. Other factors such as service...

Business Intelligence.
August 14, 2008... By Susan Avery 1% Year-over-year rise in U.S. distributors' power transmission product sales Source: www.ptda.org WHAT IT MEANS: The Power Transmission Distributors Association reports that demand from industrial buyers in...

MRO Briefs.(South Regions Minority Business Council awarding Bill Stevens Crystal Award)(Kaman Industrial Technologies awarded five-year contract)(MSC Industrial Direct has issued its 2008 motor catalog)(Brief article)
August 14, 2008... By Susan Avery The South Regions Minority Business Council (SRMBC) presented its 2008 Crystal Award for CEO/Executive of the Year to Bill Stevens, president and CEO of Motion Industries in Birmingham, Ala. The Crystal Award recognizes the...

Graybar unveils new website.(Website overview)(Brief article)
August 14, 2008... By Susan Avery Graybar has updated its company website, graybar.com . In addition to providing online access to products and services, graybar.com allows users to manage their business with the distributor according to their own...

Grainger continues with plan to expand its operations in the U.S.
August 14, 2008... By Susan Avery At the opening of a new branch in Gonzales, La., Grainger announced its plan to expand and enhance its operations throughout the Gulf region. The plan calls for the distributor to revamp its distribution network by...

And the winning teams are...(Awards list)
August 14, 2008... By Susan Avery This year, Purchasing honors three groups from ITW, Graco and Owens Corning that have what it takes to be All-Star MRO buying teams. Collaboration is what it takes to win--and to be named a Purchasing All-Star MRO Buy...

Time to check those steel contracts.(impact of increase in steel prices on already-agreed-upon contracts)(Editorial)
August 14, 2008... Paul Teague, Editor in Chief Energy and raw materials costs for steel mills have been going up at a frenetic pace all year. And, as our 2009 outlook report on page 37 predicts, the high costs they've spawned for buyers will stay high next...

Microsoft rolls out office software volume-purchasing program.
August 14, 2008... By Maria Varmazis For quite a while now, buyers have been asking for new ways to leverage their buying power when it comes to buying software. Now it seems that they're getting their wish, at least when it comes to purchasing Microsoft...

Business Intelligence.
August 14, 2008... By Maria Varmazis 50% Users dissatisfied with slow rate of change in IT use Source: Gartner WHAT IT MEANS: According to Gartner, if IT departments are slow to adopt new technologies, including automated web tools, employees...

Office Briefs.
August 14, 2008... By Maria Varmazis New data capture software from Canon allows more automation Canon recently released its imageWARE remote OMD integration module, which automates meter data capture from documents scanned in Canon-brand devices,...

Epson releases new flatbed scanner for small businesses.(Brief article)
August 14, 2008... By Maria Varmazis Office equipment manufacturer Epson recently announced its newest addition to its line of office scanners, the WorkForce GT-1500. The new flatbed scanner features a 20 page per minute (ppm) document feeder for documents...