Purchasing articles from January 2008

Purchasing archives from January 2008

"Bowled over by sourcing constraints".(Brief article)
January 17, 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 . As a purchasing manager...

Blueprint for a merger.(Procter & Gamble Co.)(Gillette Co.)
January 17, 2008... By David Hannon P&G uses Gillette deal to draft the blueprint for post-merger procurement integration. As the chief procurement officer of one of the biggest consumer products companies on the planet, Rick Hughes isn't rattled easily....

Global demand means higher prices.
January 17, 2008... By Gordon Graff Eager to relieve margin pressures from higher oil rates, chemical producers will pass along their added cost burdens this year. But long-term predictions show increased global capacity alleviating buyers' woes. Prices...

Petroleum, plant oils send surfactant prices through the roof.
January 17, 2008... By Gordon Graff Surfactant prices have soared in the past year, like many chemicals, due to the surge in prices of crude oil, which is used in the manufacture of synthetic surfactants. But the big surprise for buyers is that prices for...

Business Intelligence.(Survey)(Brief article)
January 17, 2008... By Staff 62% Buyers expecting organic chemical prices to go up in the first quarter Source: www.purchasingdata.com WHAT IT MEANS: That compares with only 47% the previous month. Inorganics saw a slightly less dramatic...

CMAI: aromatics expansion will bring prices down.
January 17, 2008... By Staff A recent study by research firm CMAI says the significant expansion of projected aromatics production capability will likely "bring aromatics pricing more in line with historical cost relationships than in recent years." ...

Dow shuts down plants, exits automotive sealers market.
January 17, 2008... By Staff Dow Chemical said it plans to exit the automotive sealers business in North America, Asia Pacific and Latin America in the next nine to 18 months and close several plants around the world in an effort to reduce its overall cost...

Sumitomo may expand Middle East JV.
January 17, 2008... By Staff Japanese chemical firm Sumitomo Chemical Co. is in talks with Saudi Aramco to expand its existing petrochemical joint venture. The two firms have a new plant due online in late 2008 that will produce optical materials and...

Pricing News.(Brief article)
January 17, 2008... By Staff Suppliers hike prices for flame retardants Specialty chemicals makers Albemarle Corp. and Chemtura both said they will increase the prices for flame retardants. Chemtura will raise its Firemaster flame retardants by...

Helium shortage spurs price hikes.
January 17, 2008... By Staff A shortage of helium supply in the U.S. and other markets has producers pushing for price increases. According to news reports, many of the world's 16 helium extraction plants are not running at full capacity and the supply...

Ethanol prices to stay put amid market stress.
January 17, 2008... By David Hannon The good news for buyers is that ethanol prices will likely not go up in 2008 due to a dramatic increase in production capacity spurring more competition in the market. The bad news is that those same market dynamics may...

Dow sells $9.5B worth of businesses into JV.
January 17, 2008... By David Hannon Dow Chemical has entered into a joint venture with the state-owned Kuwaiti Petrochemical Industries Co. under which the Kuwait firm will pay $9.5 billion to own 50% of several Dow business units in the venture. The...

Expect more from distributors in 2008.
January 17, 2008... By James Carbone Electronics buyers can expect electronics distributors to compete more for their business in 2008 as they try to boost revenue following a year of slow growth. Buyers will find that distributors will be more willing to...

Here's what you'll pay this year.
January 17, 2008... By James Carbone Prices will fall in 2008, but not as much as they did in 2007. Electronics purchasers can expect lower prices for semiconductors, passive components and connectors in 2008, but price declines will not be as steep as...

Why chip prices won't drop much: Tightening supply.
January 17, 2008... By James Carbone Semiconductor companies are cutting back on capital expenditures. That means slower growth in chip supply-and less dramatic price reductions. A lack of investment in new capacity and the growing unwillingness of...

Watch total costs if sourcing in India.
January 17, 2008... By James Carbone The benefits of cheap labor in India can be offset by higher total costs caused by poor infrastructure and the lack of a supply base. The Indian electronics industry is thriving as more OEMs and their electronics...

Capex cutbacks could cause supply headaches for electronics buyers.
January 17, 2008... By James Carbone While the overall electronics systems market is expected to grow more this year than last, there could be some supply headaches for buyers as semiconductor suppliers limit capacity additions in the wake of a...

Business Intelligence.(Survey)(Brief article)
January 17, 2008... By James Carbone 41% Electronics purchasers who say business is down from the previous month Source: www.purchasingdata.com WHAT IT MEANS: Buyers saw the beginning of the usual seasonal decline in business. 42% ...

Qimonda moves more production to 300mm wafers.(Brief article)
January 17, 2008... By James Carbone Memory IC manufacturer Qimonda says it will transition more DRAM manufacturing from 200mm wafers to 300mm wafers, adding that the share of its 300mm capacity will reach 90% by the end of the current fiscal year. At its...

Fewer military connectors will be mil-spec.(Brief article)
January 17, 2008... By James Carbone The global military connector market will grow 7.2% annually to about $3.5 billion in 2011 from $2.7 billion in 2006, according to a new report by researcher Bishop and Associates. Connectors used in sea-based defense...

Distribution Roundup.
January 17, 2008... By James Carbone Tyco expands with Avnet Tyco Electronics has extended its franchise distribution agreement with Avnet to include all of Europe, Asia-Pacific, Japan and India. The extension of the global franchise agreement...

Chinese chip market surpasses $50 billion.(Brief article)
January 17, 2008... By James Carbone The amount of semiconductors purchased in China in 2008 will rise 12% to $58 billion after growing 15% in 2007, according to researcher iSuppli. China's semiconductor revenue increased to $52 billion in 2007, up from...

Prices.(Statistical table)(Brief article)
January 17, 2008... By Staff High energy costs will continue to bedevil buyers (Buyers 90-day price expectations) -------------------------------------------- UP DOWN SAME INDEX Energy 75% 6% 19% 84.2...

Airfares are Increasing.(Brief article)
January 17, 2008... By Staff Rick Seaney of FareCompare.com said in a recent interview with the Dallas Star-Telegram that airlines are boosting airfares. With load factors over 90% this past summer, rates have gone up. But Seaney points out that business...

Nippon Wins 10% Plate Hike.(Nippon Steel Corp.)(Brief article)
January 17, 2008... By Staff Nippon Steel won a 10% price hike on its thick steel plate sold in the fourth quarter for first quarter delivery to the shipbuilding and machinery sectors in Asia. That equates to a marketplace increase of $62-$72/metric ton.

Mechanical Tubing Drops.(Brief article)
January 17, 2008... By Staff Spot prices for mechanical steel tubing accelerated their slide in December. This has surprised some industry analysts who expected higher prices in the wake of reduced imports in the first 11 months of 2007 and proposed...

Ethanol Prices may be Higher.(Brief article)
January 17, 2008... By Staff Fuel-Grade ethanol prices-up 20% over the past three months to $2.31/gallon at year's end-are likely to rise further, fueled by the new U.S. energy bill, Citigroup analysts say in a report to clients. "We firmly believe the new...

Economy + Supply.(Statistical table)(Brief article)
January 17, 2008... By Staff Buying plans remain low (National, buying plans, 30-days) -------------------------------------------- UP DOWN SAME INDEX Energy 26% 16% 58% 55.2 Tooling ...

Analysts Debate Recession.
January 17, 2008... By Staff Economists at Morgan Stanley predicted the U.S. economy could go into a mild recession in 2008, citing credit conditions, a slump in business capital spending and a slowdown in global growth. "A mild U.S. recession is now likely,...

Clean Energy Outlays Grow.(Brief article)
January 17, 2008... By Staff The amount of money invested in the so-called clean-energy sector grew 35% to $117 billion in 2007, according to London-based research firm New Energy Finance. Wind power continued to lead the way, but the year also saw strong...

Nissan to Cut Weight by 15%.(Nissan Motor Company Ltd.)(Brief article)
January 17, 2008... By Staff Nissan Motor will reduce the weight of its vehicles by an average of 15% over the next seven years as it seeks to improve fuel efficiency. The weight reduction will be gauged against the automaker's 2005 model year. Nissan will...

11-Month Chip Sales Up 2.8%.(Brief article)
January 17, 2008... By Staff Worldwide sales of microprocessors were up 2.3% in November, boosted by strong demand for consumer products, the Semiconductor Industry Association reports. Chip sales rose to $23.1 billion in the month, up from $22.5 billion in...

Electronics Leadtimes.(Statistical table)(Brief article)
January 17, 2008... By Staff DRAM leadtimes expand (monthly weighted average in weeks) ---------------------------------------------------- December November TREND LONGEST LEADTIMES DRAM: 128 Mb ...

Crude Oil Prices Hit $100.(Brief article)
January 17, 2008... By Staff Forecasts of moderately high crude oil prices may have been obliterated on January 2 when futures prices soared to $100 a barrel for the first time, reaching that milestone amid an unshakeable view that global demand for oil and...

Dram Capex to Slow.(Brief article)
January 17, 2008... By Staff There's been plenty of dynamic random access memory (DRAM) chips worldwide, which is why analysts at Fitch Ratings see a continued buyers' market for semiconductors. Some other analysts suggest capacity cutbacks to boost prices.

Ethanol Shakeout is Due.(Brief article)
January 17, 2008... By Staff A recent report from Fitch Ratings says agribusiness is experiencing strong market conditions globally but the oversupply of ethanol could pressure earnings in that sector and result in an industry shakeout among smaller, weaker...

Australian Nickel may Expand.(Brief article)
January 17, 2008... By Staff Minara Resources, Australia's second-largest nickel producer, may spend $1.1 billion to double nickel production from its Murrin mine and plant by 2011. CEO Peter Johnston wants to boost production by as much as 10,000 metric tons...

Asean Nations form Trade Pact.(Brief article)
January 17, 2008... By Staff The 10 members of the Association of Southeast Asian Nations (ASEAN) have agreed to eliminate trade barriers for goods and services in an attempt to create a European Union-modeled economic community by 2015 and compete with China...

Synfuel Facility Planned.
January 17, 2008... By Staff Dow Chemical and Hunton Energy plan to build a new gasification facility in Freeport, Texas, that would produce synthetic natural gas from the petroleum coke byproduct of oil refineries. The process also would produce such...

Ariba Closes on Procuri.(Brief article)
January 17, 2008... By Staff Spend management software provider Ariba in December closed on its acquisition of Procuri. The deal gives Ariba greater access to midmarket customers. According to Ariba CEO Bob Calderoni, more than 70% of Procuri's 300 customers...

LCD Shortage is Possible.(Brief article)
January 17, 2008... By Staff Booming demand for televisions and personal computers flat-screen liquid crystal displays could trigger a global shortage of LCDs this year, according to a recent forecast from Taiwan's AU Optronics, the world's No.3 maker of...

Hitachi may Quit Hard Drives.(Brief article)
January 17, 2008... By Staff High-Tech manufacturer Hitachi may be looking to sell part or all of its money-losing hard-disk-drive business. According to news reports in Japan, the firm has been in talks with Silver Lake Partners, a U.S. investment fund, to...

Cobalt Price Sets Records.(Brief article)
January 17, 2008... By Staff The price of cobalt surged to a record level of $40.25/lb in early January trading due to booming demand from electronics and automotive buyers and supply problems in the war-stricken Democratic Republic of Congo. Spot cobalt...

Precious Metals may Cost More.(Brief article)
January 17, 2008... By Staff Analysts are projecting near-record precious metals prices in 2008. In fact, Dan Raab, managing director of AIG Financial Products sees platinum touching all-time highs late this year. Gold, silver and other platinum group metals...

Copper Prices will Rise.(Brief article)
January 17, 2008... By Staff Regarding copper, "the commodity bull market is still very much in its early stages,'' suggests Kevin Norrish, director of commodity research for Barclays Capital. Norrish is a contrarian. Although world demand is down and the...

Trucking Rates to Stay Low.
January 17, 2008... By Staff Bear stearns reaffirmed its view that LTL and truckload rates will remain low through 2008. In a recent note to clients, analyst Ed Wolfe said, "given the weakness of current pricing dynamics for both TL and LTL providers, we...

Uranium Price may Go Higher.(Brief article)
January 17, 2008... By Staff Ian Henderson, a JPMorgan Asset Management analyst, says the uranium market is "at the foothill of a supply shortage" that will inflate prices off the recent plateau of $90/lb. Last summer, speculative trading boosted uranium as...

Dram Price Dive Over?(Brief article)
January 17, 2008... By Staff "Dram price falls have hit bottom," according to Elpida President Yukio Sakamoto, who says margins are improving and mobile dynamic random access memory prices are likely to fall 30% in 2007 and again in 2008, less than half the...

Specialty Chemicals Increase.(Brief article)
January 17, 2008... By Staff Specialty Chemical Firms such as Nalco are seeking price increases of 8% to 12% on specialty chemicals purchased by the paper industry because of a rise in energy costs. Nalco has said some feedstock supply shortages also have...

Dow turns inward.(Dow Chemical Co. (Midland, Michigan))
January 17, 2008... By Susan Avery The chemicals giant expands its internal outreach as it moves from the tactical to the strategic in procurement activities. Purchasing is all about relationships-building and maintaining relationships with suppliers and...

Software shines light on savings.
January 17, 2008... By Maria Varmazis As margins shrink, more companies bring inventories down to the bare minimum with software that adds visibility and speed to the supply chain. Inventory management can be a bit of a balancing act. Buyers struggle to...

Competition heats up in the Asian small-parcel market.
January 17, 2008... By David Hannon Supply chain professionals being tasked with establishing or managing small parcel networks in Asia report being pleasantly surprised by the coverage and competition from the major parcel carriers. That said, there are some...

Asian small parcel timeline.(Brief article)
January 17, 2008... By David Hannon 1986 DHL enters into a joint venture with the People's Republic of China and becomes the first express company active in China. UPS establishes its Asia Pacific business. 1988 UPS enters Asia-Pacific market....

Railroads will face pressure to merge.(Brief article)
January 17, 2008... By David Hannon The CEO of Canada's biggest railroad said recently that the largest U.S. railroads would face intense shareholder pressure to merge in the coming years as they struggle to increase capacity and volumes. "There's going to be...

Ocean freight rates to peak in 2008.(Brief article)
January 17, 2008... By David Hannon Despite hitting continued all-time highs throughout 2007, drybulk ocean freight rates will continue up at least for part of 2008 until additional ocean freight capacity comes online. According to Michael Drayton,...

LTL carriers get more competitive as demand slowdown continues.
January 17, 2008... By David Hannon Less-than-truckload (LTL) carriers continue to report a slump in demand for their services and are getting increasingly competitive on cost, say market watchers. The housing and general economic slowdown in the U.S. is...

Lufthansa reports overcapacity, Forward buys BlackHawk.(Brief article)
January 17, 2008... By David Hannon Global capacity for the air cargo industry will increase in the next five years, giving air freight buyers and users more selection, according to an executive with Lufthansa's air cargo unit. Andreas Otto unit product...

Business Intelligence.(Survey)(Brief article)
January 17, 2008... By David Hannon $90M Price DHL will pay for Sinotrans' share of logistics JV in China Source: DHL WHAT IT MEANS: Competition among logistics providers for market share in China is fierce. DHL's buying Sinotrans out of the...

Prices will stay up.
January 17, 2008... By Tom Stundza Commodities and other materials may drop, but will stay pricey in 2008, as manufacturing takes a hit from high energy costs, the construction slump and sluggish economic growth. Buyers in manufacturing and construction...

Here's what you'll pay this year.
January 17, 2008... By Tom Stundza Nonferrous metals will cost slightly less this year as the pricing supercycle comes to an end. However, commodity steel will cost a little more. Metals prices have completed the sixth year of a bull-pricing phase that...

Buyers will have a busy year...
January 17, 2008... By Tom Stundza The 2008 economic outlook remains bleak. The housing market will fall into a deeper hole; consumers will continue tightening their belts; factories will limp along-requiring export orders to stay busy-and buyers will be...

...and here's what buyers will be doing.
January 17, 2008... By Staff Four buyers explain how they are handling the economic uncertainty in their markets. Appliances Ed Dunn , Vice President of Supply, Carrier Corp. Work Lean and build supplier relationships While Ed Dunn, vice...

Imports dropped 26% in 2007; outlook for 2008 is so-so.
January 17, 2008... By Tom Stundza Steel demand in the U.S. softened last year, evidenced by low shipments, shrunken inventories and reduced imports. The weak dollar and high freight prices could keep steel imports depressed in 2008, traders suggest. And...

Alcoa expands recycling capability 50%.(Brief article)
January 17, 2008... By Tom Stundza Alcoa has broken ground on a new $22 million project at the used beverage can (UBC) reclamation facility at its Blount County, Tenn., smelting operations near Knoxville. Alcoa's Tennessee operation is the world's largest...

Michigan OKs Kennecott mine.(Kennecott Minerals Co.)(Brief article)
January 17, 2008... By Tom Stundza Michigan department of Environmental Quality recently approved permits allowing Kennecott Minerals Co. to operate a nickel and copper mine in the Upper Peninsula. The mine, which Kennecott calls Eagle Project, is near...

World Gold Council eyes use in automotive catalytic converters.(Brief article)
January 17, 2008... By Tom Stundza The World Gold Council in London and emission control technology group Nanostellar of Redwood City, Calif., have begun a strategic partnership aimed at developing gold as an ingredient in the manufacture of automotive...

Alexin has broken ground on greenfield billet plant in Indiana.(Brief article)
January 17, 2008... By Tom Stundza Aluminum processing company Alexin plans to build a 350,000-sq-ft plant in Bluffton, Ind., where scrap aluminum is to be re-melted into aluminum billet. Tom Horter, former billet casting manager at an Alcan plant in Sebree,...

Global Briefs.(Briefs)(Brief article)
January 17, 2008... By Tom Stundza The Valex subsidiary of the Los Angeles-based Reliance Steel & Aluminum metals services center chain has opened a facility in China to produce ultra high purity tubes, fittings and valves for the semiconductor, liquid...

Monthly production trimmed worldwide in the fourth quarter.
January 17, 2008... By Tom Stundza The global slowdown in stainless steel demand triggered fourth quarter cutbacks in nickel-based steelmaking in Europe, China and South Korea. Data from the International Stainless Steel Forum (ISSF) shows that stainless...

ArcelorMittal plans a new steel beam mill in Quebec.(Brief article)
January 17, 2008... By Tom Stundza ArcelorMittal will build a $380 million steel beam mill in Contrecoeur, Quebec, that could begin production as early as 2010. Beams are not produced in Canada so the plant probably will reduce imports from the U.S. Imports...

Business Intelligence.(Brief article)
January 17, 2008... By Tom Stundza 34.6M 2007 steel import tonnage Source: U.S. Census Bureau WHAT IT MEANS: Steel imports to the U.S. declined dramatically in the second half of 2007, ending chances of matching the all-time record year of...

Metals Chips.
January 17, 2008... By Tom Stundza Steel service center Mi-Tech Steel is being integrated into co-owner Steel Technologies , a flat-rolled steel processor. Mi-tech actually is a 50/50 joint venture of Mitsui & Co. of Japan and Steel Technologies of...

Flat-rolled trading in New York put off until "sometime" this year.
January 17, 2008... By Tom Stundza The much-ballyhooed launch of steel futures contracts has withered into trading of billet and bar products in small regional markets overseas. Sheet-steel trading may commence in 2008 but nothing definitive has been...

No end seen for the weak demand from downstream end-use markets.
January 17, 2008... By Tom Stundza Commodity-grade aluminum demand in North America has been relatively soft lately, says analyst Chuck Bradford at Bradford Research in New York. In fact, "conditions in the aluminum market have been ugly since the beginning...

ArcelorMittal calls off sale of Maryland mill.
January 17, 2008... By Tom Stundza ArcelorMittal has terminated its agreement to sell its Sparrows Point, Md., steel mill to a group led by Esmark, a Chicago Heights, Ill.-based steel distributor working to expand into steelmaking, for $1.35 billion. The...

Timet defers titanium sponge plant.(Titanium Metals Corp.)(Brief article)
January 17, 2008... By Tom Stundza Titanium metals corp. (Timet) has decided against starting construction of a new titanium sponge plant. Based on the company's recently completed sponge production expansion at Henderson, Nev., and a new long-term sponge...

Steel Briefs.(briefs)
January 17, 2008... By Tom Stundza ArcelorMittal mothballs hot mill ArcelorMittal, the hot mill at Weirton, W. Va. has been winterized and mothballed until slabs are needed for conversion to coils at this and other major flat-rolled mills. ArcelorMittal...

Climax moly mine to re-open.(Freeport-McMoRan Copper and Gold Inc.)(Brief article)
January 17, 2008... By Tom Stundza Freeport-McMoRan copper & Gold is spending $500 million to reopen the Climax molybdenum open pit mine near Leadville, Colo., and construct state-of-the-art milling facilities. Annual molybdenum production is expected at 30...

Business Intelligence.(Survey)(Brief article)
January 17, 2008... By Susan Avery $73,880 Average salary of MRO commodity manager Source: Purchasing's 27th annual salary survey WHAT IT MEANS: These buyers earn more than their peers with the same title who have responsibility for metals,...

To ward off economic chills, MRO buyers work on relationships in '08.(maintenance, repair and operations)
January 17, 2008... By Susan Avery The sub-prime mortgage crisis and oil prices are playing into plans of maintenance, repair and operations (MRO) buyers and industrial distributors this year. They're also taking into account strong demand for commodities by...

MRO Briefs.(Briefs)(Brief article)
January 17, 2008... By Susan Avery Graybar is working with GE Security to distribute its security products and systems. The distributor, based in St. Louis, will carry GE Security video surveillance, intrusion, access control and fiber optic systems. These...

Commodities prices may be high, but here is a way to control other costs.
January 17, 2008... By Paul Teague, Editor in Chief Steel and chemicals prices will go up this year, even in the face of weak demand, while other raw materials will go down in price. As usual, the cost-increase picture is slightly out of focus, especially...

What to look for in multi-function products in 2008.
January 17, 2008... By Maria Varmazis One of the most popular machines for offices of all sizes are multi-function products (MFPs), which are combination products that can combine print, copy, scan and fax capabilities in one of many possible configurations....

Business Intelligence.(Survey)(Brief article)
January 17, 2008... By Maria Varmazis 12 Year high for pulp prices Source: www.purchsingdata.com WHAT IT MEANS: As global supply for pulp stays low and prices are at record highs, paper prices reflect this squeeze and are creeping ever upwards...