Purchasing articles from July 2008

Purchasing archives from July 2008

How to improve supplier performance.(Brief article)
July 17, 2008... Staff When John Martin took the job of global procurement manager for a major manufacturer of security products, he learned that supplier-delivery performance was poor. Suppliers on average were achieving only 80-85% on-time performance....

The meter's running on polystyrene prices despite demand drop.
July 17, 2008... By Gordon Graff Demand for polystyrene is down significantly this year, as the vital construction sector for this material has withered in a slow economy. And with overcapacity bedeviling polystyrene producers, as it has for several years,...

Business Intelligence.
July 17, 2008... Gordon Graff 89% Buyers at chemical companies reporting price increases in June Source: www.purchasingdata.com WHAT IT MEANS: Price increases at chemical-consuming firms hit a record high in June, according to an index based...

Caustic soda prices hit high on supply snags.(Brief article)
July 17, 2008... Staff The force majeure from the huge Dow Chemical caustic soda plant in Freeport, Texas, and subsequent reduction in shipments has triggered price inflation, pushing market prices above $600/ton for all grades. Purchasingdata.com's latest...

Styrene producers continue to raise prices to offset energy costs.
July 17, 2008... By Gordon Graff Styrene producers in North America, beset with dramatically higher costs for their petroleum-derived feedstocks, continue to hike their prices. While rising oil will probably continue to drive up styrene tags for months to...

Chemical sourcing conference set for Boston.
July 17, 2008... Staff Information to help chemical buyers and supply chain managers prepare for the 2009-2010 global economy, energy feedstocks and key chemical families will be presented at the Chemical Purchasing Summit in Boston on Sept. 17-18 at the...

Blanket price increases get mixed reaction.(Brief article)
July 17, 2008... Staff Wall Street mavens say the equities market reacted positively to Dow Chemical's recent headline-making announcement that it was raising prices by 20% to cover soaring costs. But buyers viewed it as a negative and appear to have cut...

Energy price increases continue to haunt chemical buyers.
July 17, 2008... Staff Energy prices continue to be a major thorn in buyers' sides as oil, gas, diesel and other energy products continue to set new records almost daily. In Purchasingdata.com's monthly business survey, 91% of buyers polled said...

Rohm and Haas to cut staff, chemical production capacity.(Brief article)
July 17, 2008... Staff Specialty chemicals maker Rohm and Haas plans to reduce its workforce and cut its installed capacity in the company's emulsions network in North America by 30%, "reflecting equally the impact of productivity improvement efforts and...

Lubrizol continues supply chain overhaul, issues price increases.
July 17, 2008... Staff Specialty chemical maker Lubrizol continued its overhaul by announcing that it plans to close its Avon Lake, Ohio plant and beginning in the third quarter it will transition selected acrylic emulsions from the Ohio site to other...

Specialized distributors offer technical expertise.
July 17, 2008... By James Carbone Buyers often purchase parts from broad line distributors because of the breadth of products that those distributors carry. However, sometimes there is an advantage to doing business with limited line semiconductor...

Memory IC buyers can expect more price declines for DRAMs.
July 17, 2008... By James Carbone Contract and spot market DRAM prices began to increase in the second quarter, but the increases will be short-lived. Nam Kim, principal analyst for researcher iSuppli in El Segundo, Calif., says that DRAM prices...

Intel to cooperate with FTC antitrust probe.
July 17, 2008... By James Carbone Semiconductor giant Intel says it is cooperating with a Federal Trade Commission (FTC) investigation that is probing alleged anticompetitive conduct. AMD, Intel's rival in microprocessors, refused comment on the...

Avnet Express enhances website.
July 17, 2008... By James Carbone Avnet Express, the small order division of Avnet Electronics Marketing, recently added new functionality to its website, providing more information about parts to buyers and engineers. The new site is designed to help...

PCs in use surpass 1 billion.(personal computers)(Brief article)
July 17, 2008... By James Carbone The number of installed PCs worldwide has surpassed 1 billion and will reach 2 billion by early 2014, if the present 12% annual growth rate continues, according to Gartner Research. The installed base of PCs is the...

Processor shipments rise in first quarter.(Brief article)
July 17, 2008... By James Carbone PC microprocessor shipments increased 25.7% in the first quarter. Microprocessor revenue increased nearly 16% over the same period. Both unit shipments and revenue in the first quarter declined from the fourth quarter...

Distribution Briefs.(Mouser Electronics Inc.)(Teridian Semiconductor)(Brief article)
July 17, 2008... By James Carbone Mouser signs new agreements Mouser Electronics has signed a global distribution agreement with Teridian Semiconductor, an Irvine, Calif.-based supplier of mixed-signal integrated circuits. Mansfield, Texas-based...

Memory price declines slow chip industry growth.
July 17, 2008... By James Carbone Weak prices for DRAM and other memory ICs will result in a lower-than-expected revenue growth rate for the chip industry and electronics buyers should take note, as there is increasing risk of suppliers scaling back...

Distribution Briefs.
July 17, 2008... By James Carbone Digi-Key signs Kaltman, RPM Digi-Key and Kaltman Creations have announced they have signed a worldwide distribution agreement. Kaltman Creations, based in Suwanee, Ga., supplies RF spectrum analyzers and LOG...

Higher material, labor costs stifle passive component price cuts.
July 17, 2008... By Gina Roos Buyers should prepare for higher prices for specialty passives components, and only modest price declines for commodity passives for the rest of this year and into first quarter 2009. Suppliers say rising raw materials...

Qimonda, Elpida ink DRAM deal.(Brief article)
July 17, 2008... By James Carbone DRAM suppliers Qimonda and Elpida Memory have signed a strategic technology partnership on joint development of DRAMs. The companies will jointly develop technology platforms and design rules for new DRAMs....

Look for large LCD panel prices to rise slightly.(Brief article)
July 17, 2008... By James Carbone Buyers can expect slightly higher prices for large-sized liquid crystal displays (LCDs) through at least the first quarter of 2009, despite strong demand. Unit shipments of large-size panels--those measuring 10 in. or...

Chip prices could be going up.
July 17, 2008... By James Carbone Semiconductor foundries, which are doing an increasing amount of chip manufacturing, are cutting back on capital expenditures. If they don't have the capacity to meet demand, prices will go up next year. A cutback in...

Memory makers slip in rankings.(Financial report)
July 17, 2008... By James Carbone Plummeting prices resulted in DRAM and flash memory makers suffering revenue declines in 2007. Intel and Samsung--two companies that supply a lot of chips to the computer industry--remain the top semiconductor...

Technology is not enough.
July 17, 2008... By James Carbone The leading semiconductor suppliers often have cutting-edge technology, but they also meet the cost, quality and delivery requirements of OEMs and electronics manufacturing services (EMS) providers. One reason Intel,...

Higher prices just keep on coming.
July 17, 2008... By Tom Stundza With inventories low at service centers and imports into the U.S. scarce, the chance of price-deflating oversupply appears remote. Upshot: Buyers can expect sheet steel prices to plateau at a new, higher level. The sheet...

Galvanized-sheet prices erupt.
July 17, 2008... By Tom Stundza Buying is down, but prices are up--dramatically. And more price hikes are likely. Since inventories are tight and some raw materials are expensive, galvanized sheet steel prices shot up by nearly 50% in the second...

Buyers search the globe for the right logistics partners, strategy.
July 17, 2008... By David Hannon In rapidly globalizing industries such as life sciences and chemicals, purchasing and logistics professionals scour the globe to find the right logistics strategy and providers. You're globalizing--fast. At one end of...

How financial services firms buy.(Merrill Lynch & Company Inc.)
July 17, 2008... By Maria Varmazis When all you buy is indirect and most of your commodities are highly complex, you have to think creatively to get by. Marc Marini knows well how procurement works at industrial companies. With 15 years of experience...

How to build the Green chemical supply chain.
July 17, 2008... By Richard Weissman Chemical buyers begin to realize and measure the benefits of environmentally friendly sourcing. The chemical supply chain is turning Green. Not necessarily the dark lush green of summer, but more like the blush of...

Buyers follow pipeline back to the Middle East.
July 17, 2008... By David Hannon Petrochemicals companies are expanding in the area, encouraged by governments that are trying to lessen their dependence on oil exports. With energy costs far and away the biggest concern at most U.S. companies--most...

How to control travel costs.
July 17, 2008... By Susan Avery Air fares and hotel room rates are up, and there's little relief in sight. Still, there are ways for buyers to manage the impact of higher prices now and in 2009. Despite rising prices, companies are not cutting back on...

Buyers are balancingcost & risk.
July 17, 2008... By Tom Stundza Purchasing chiefs say that risk management in 2008 is more about reducing today's inflated costs of energy and materials than finding ways to minimize future costs. Inflation has been battering manufacturing commodities,...

What's behind materials-cost inflation.
July 17, 2008... By Tom Stundza Purchasing of materials has declined in the U.S. this year but inflation has become a way of life for buyers. Midyear transaction price averages for key manufacturing and construction materials have increased above...

Intel retools.(transformation of Intel Corps. material management and procurement methods )
July 17, 2008... By Susan Avery Transforming an organization to face global realities is one of procurement's big challenges. Here is how Intel transformed, and the results. When Craig Brown took the reins as director of the materials organization at...

Poll: U.S. skirts recession.(Brief article)
July 17, 2008... STAFF A recent survey of 48 private economists found that more than half think the U.S. will avoid a recession this year, but growth and recovery will come slowly. Conducted by the Blue Chip Economic Indicators newsletter, the poll found...

Toshiba to cut production.
July 17, 2008... STAFF Toshiba in June said as a cost reduction strategy, it will cut flash-memory production at older factories in Japan, that make chips out of 200mm wafers by 40% and focus on 300mm production. The chipmaker said it will relocate and...

$200 oil will devastate.(Brief article)
July 17, 2008... STAFF If oil prices rise to $200/barrel it "would break the back of the global economy" according to Deutsche Bank's chief energy economist Adam Sieminski. "Next step after $200 would be global recession and bad news for everybody."

Navigation devices boom.(Brief article)
July 17, 2008... STAFF Demand for personal navigation devices will explode in the next five years, with shipments rising more than 120%, according to researcher In-Stat. That will increase demand for the components that go into them, as well. Shipments of...

Nanya cuts capex.(Nanya Technology Corp. cutting capital expenditure)(Brief article)
July 17, 2008... STAFF DRAM maker Nanya said it will cut its capital spending this year as lower chip prices have forced the Taiwanese chipmaker to rethink its spending plans. A vice president told members of the press at a briefing its capital spending...

Formosa builds steel plant in Vietnam.(Brief article)
July 17, 2008... STAFF Formosa Plastics Group, Taiwan's biggest diversified industrial company, said accelerating inflation in Vietnam won't deter it from the construction of a steel plant in the Southeast Asian nation this month. Formosa is also studying...

Ashland signs JV.(Ashland Chemical forming a joint venture with Sud-Chemie)(Brief article)
July 17, 2008... STAFF Ashland Chemical has signed a memorandum of understanding to form a global specialty chemical joint venture with Sud-Chemie, which will serve foundries and the metal casting industry especially in Europe, the Americas and Asia....

Coal supply falls short.(Brief article)
July 17, 2008... STAFF Supply of coking coal, used in steelmaking, will fall short of consumption for another year in 2008, Macquarie Group said in a June 9 report. Thermal coal, used in power plants, will also be in a deficit this year before recovering...

Suppliers push cost reduction.(Michael Klayko, CEO of telecommunications supplier)(Brief article)
July 17, 2008... STAFF Michael Klayko, CEO of telecommunications supplier Brodcade, says selling today is more about cost-reduction than providing value. "If you can show a customer how they can eliminate cost, how they can eliminate complexity from their...

Mortgage apps hit six-year low.(Brief article)
July 17, 2008... STAFF Mortgage applications for the week ended June 20 hit a six-year low in the U.S. in June according to the Mortgage Bankers Association and U.S. sales of newly built single-family homes in May was off more than 40% from a year ago.

What's the magic number?(Brief article)
July 17, 2008... STAFF A recent survey of more than 100 manufacturing companies found that on average, they only source 15% of their materials or manufacturing from China. The AMR Research report also found that more than half (51%) polled cited rising...

Metals supply may tighten.(Brief article)
July 17, 2008... STAFF A recent report from Barclays analysts said that supply of copper and aluminum will tighten throughout the rest of the year due to global power shortages and lack of ore. But Kevin Norrish, commodities research director says "the...

Sabic may expand in china.(Saudi Basic Industries Corp.)(Brief article)
July 17, 2008... STAFF Middle Eastern chemical giant Saudi Basic Industries Corp. (SABIC) could more than double its investment in a China ethylene complex. According to reports SABIC and Sinopec want to expand an earlier agreed project into a full-fledged...

1Q GDP revised up.(Brief article)
July 17, 2008... STAFF The U.S. economy grew at a slightly faster pace in the first quarter than originally reported, but the new revision showed inflation was stronger than estimated. The Commerce Department said in its final revision that the nation's...

Economy + Supply.
July 17, 2008... Staff [TABLE OMITTED]

Commodity price index peaks.(Brief article)
July 17, 2008... STAFF Purchasing's commodity price index increased in June to a stratospheric high of 289, the highest reading since the index was adjusted in January 1992 and a 44% year-over-year increase.

Nalco: Aluminum will be up.(Brief article)
July 17, 2008... STAFF India's largest aluminum producer, National Aluminum Co. (Nalco) raised its aluminum price forecast to $2,800-$3,000/metric ton, up from an earlier forecast of between $2,500 and $2,800. "Power problems have restricted supplies while...

Coal prices headed up.(Brief article)
July 17, 2008... STAFF Stifel Nicolaus analyst Paul Forward raised his 2009 price expectation for Central Appalachian steam coal to $105/ton from $85 and lifted his price forecast for Central Appalachian metallurgical coal, used in steel production, to a...

Gold up on speculation.(Brief article)
July 17, 2008... STAFF Gold priecs may average more than $1,100/oz according to a new forecast by Paul Walker, CEO of London-based research company GFMS Ltd. Gold prices soared to a record $1,032/oz in March on speculative buying, even as supply of the...

Truckload rates turn up.(Brief article)
July 17, 2008... STAFF Stephens Inc. analyst Thom Albrecht said the increasing number of truckload carrier bankruptcies due to high diesel prices will drive increased demand for remaining players an send spot trucking rates up. "Carrier failures will be so...

Dow pushes another hike.(Dow Chemical Co)(Brief article)
July 17, 2008... STAFF Less than a month after pushing a 20% price hike, Dow Chemical issued another dramatic price increase, this time up to 25%. The new hike took effect in July and came along with more bad news for chemical buyers: Dow will also begin...

Lieberman blames speculators.(Senator Joseph Lieberman)(Brief article)
July 17, 2008... STAFF As Congress debates regulating the commodities trading market, Connecticut Senator Joseph Lieberman told a Senate hearing on commodity speculation that speculators are to blame for much of the high commodity costs. "The steady upward...

It's not just investors.
July 17, 2008... STAFF Not everyone agrees that the increase in speculative buying is the reason for higher commodity costs. "So far the available data doesn't support the idea that speculators are driving prices up: quite the contrary," said Francisco...

Commodity prices to stay high.(Brief article)
July 17, 2008... STAFF The head of Nucor Steel warns buyers that "The bull market for commodities will last for decades to come." Dan DiMicco told a recent steel industry conference that while raw materials and scrap will remain high in price, steel...

Canadian commodities peak.(Brief article)
July 17, 2008... STAFF Scotiabank's commodity price index, which measures price trends in 32 of Canada's major exports, surged to a new high in May, climbing 3.9%, the fifth consecutive record in as many months in 2008. Specifically, Scotiabank says potash...

Frequent flyers get pinched.(Delta Air Lines Inc. charging a fuel surcharge fee )(Brief article)
July 17, 2008... STAFF Delta Air Lines will begin charging a fuel surcharge fee of up to $50 for redemption of frequent flyer miles to help offset its fuel costs. Other airlines are raising fuel surcharges as high as 80%, as is the case for Malaysia...

Micron: Prices fell 5%.(Brief article)
July 17, 2008... STAFF Micron sais average prices for its memory chips fell 5% in the quarter ended May 29 and prices for the current quarter look to remain about the same. Micron plans major reductions in capital expenditures next year, possibly going...

Steel rod prices going up.(Brief article)
July 17, 2008... STAFF Fast on the heels of a U.S. government decision to maintain duties on rod imports from six countries, North American wire mills led by ArcelorMittal are boosting list prices for by $60/ton to $1,140 for low-carbon product. List...

Cobalt prices drop.(Brief article)
July 17, 2008... STAFF Domestic cobalt prices have declined 13% since the peak in March and some analysts believe they will slide further off the $45.50/lb average in June. According to Purchasingdata.com, cobalt prices have averaged almost $49/lb in the...

Prices.
July 17, 2008... Staff [TABLE OMITTED]

Wolseley sees better service from truckload market consolidation.
July 17, 2008... By David Hannon As one of the biggest plumbing supplies distributors in North America, Wolseley North America and its Fergusson Enterprises division rely heavily on their logistics providers to get products into their distribution centers...

Business Intelligence.
July 17, 2008... By David Hannon 9,437 Baltic Dry Index on June 18 Source: Baltic Exchange WHAT IT MEANS: That's where the index stood after its dramatic plunge June 12. While still high historically, the drop is an indication that previous...

US Postal Service leverages 3PL partner for improved ordering.
July 17, 2008... By David Hannon Most people wouldn't consider an old limestone mine-turned underground warehouse as the best location to breed innovation. But for Frank Scheer and Thomas Whitling of the US Postal Service's supply management organization,...

Railroads push Green to make the most of high fuel costs.
July 17, 2008... By David Hannon While the ever-increasing cost of diesel and gasoline have many shippers and freight buyers up in arms, freight railroads view the current environment as a chance to emphasize their fuel efficiency and gain volume from...

DHL gets overhaul, partners with UPS.(Brief article)
July 17, 2008... By David Hannon Logistics giant Deutsche Post announced in May that it will restructure its DHL Express U.S. unit under a three-part plan that includes DHL contracting with rival UPS for air freight services in North America. DHL will also...

Economic slowdown weighs on intermodal volumes.(Brief article)
July 17, 2008... By David Hannon While record-high gasoline and diesel prices are driving more interest in rail and intermodal shipments domestically, the overall economic slowdown and decline in international containers is having a bigger impact on...

UPS moves Asian hub to China.(United Parcel Service of America Inc.)(Brief article)
July 17, 2008... By David Hannon UPS says the growing manufacturing center north of Shenzhen, China and increased intra-Asian shipping activity have led the logistics giant to spend $180 million to relocate its intra-Asian logistics hub to Shenzhen. The...

Air, ocean carriers increase fuel surcharges.
July 17, 2008... By David Hannon Northwest Airlines' Cargo division is increasing its fuel surcharges both domestically and internationally. Domestic shipments will now include a surcharge of 48¢/lb up 4¢. NWA is increasing the fuel surcharge...

When will the fundamentals improve? Probably not until 2009.(supply and demand of aluminum)
July 17, 2008... By Tom Stundza Use of Aluminum mill products dropped 7% in the U.S. in 2007 and is falling through spring this year at the same rate. Market analysts say demand concerns are mounting because of weakened growth in manufacturing. That view...

Nucor chief sees decades ahead of high commodity prices.(Dan DiMicco CEO of Nucor Corp.)
July 17, 2008... By Tom Stundza The costs of steelmaking raw materials as iron ore, coal and scrap metal will stay elevated for many years, keeping cost pressure on steel manufacturers and price pressure on buyers, says Dan DiMicco, the chairman, president...

Chinese demand could boost cathode past $4/lb.
July 17, 2008... By Tom Stundza World copper prices averaged close to $3.70/lb in the first half and could rise to $4.08 in the fourth quarter of this year, if China ramps up imports of refined primary cathode, forecasts Kevin Norrish, director of...

Esmark accepts Severstal's marriage proposal.(Esmark to be acquired by Severstal )
July 17, 2008... By Tom Stundza Steelmaking and distributing company Esmark has agreed to be acquired by Russian metals giant Severstal of Moscow, which sweetened its previous offer to $1.25 billion. Esmark's operations, which range from steelmaker...

OECD Steel Committee says demand, capacity will continue to advance.
July 17, 2008... By Tom Stundza Global steel demand growth continues to be led by emerging economies, to meet the requirements of expanding industrial sectors and infrastructure growth. Demand growth for steel in many mature economies has slowed in line...

LME prices on pace to drop 40%.(London Metal Exchange)(Brief article)
July 17, 2008... By Tom Stundza Zinc supply is outpacing demand as production continues to increase despite high global inventories. In fact, the International Lead and Zinc Study Group now forecasts the metal used to galvanize steel will have a surplus of...

Demand growth will outpace supply for next decade.
July 17, 2008... By Tom Stundza Goldman Sachs Group analysts believe that global steel markets will remain in a tight supply/demand balance for some time to come because of "recent fast growth in demand relative to limited growth in supply." Analyst...

ArcelorMittal, Chinese companies plan to make automotive grades.(Brief article)
July 17, 2008... By Tom Stundza Global steel giant ArcelorMittal and its Chinese partners--Hunan Valin Group and Hunan Valin Steel--plan to establish an automotive steel joint venture with capacity of around 1.2 million metric tons/year. Products will...

Business Intelligence.
July 17, 2008... By Tom Stundza $3,275 Price for ferromanganese Source: Platts Metals Week WHAT IT MEANS: The long-ton price of high-carbon ferromanganese set a record in June. Inflation isn't over; there are reports of suppliers and traders...

Alcoa cites risks, costs in tightening payment terms.(Alcoa Inc. shortening payment terms to five days from 30 days)
July 17, 2008... By Tom Stundza Aluminum giant Alcoa of Pittsburgh this month began shortening payment terms for some its ingot products to five days from 30 days, citing increased credit risk and escalating freight costs. Previously the company based...

Tough times ahead for North American processors.
July 17, 2008... By Tom Stundza North American metalforming companies don't expect business prospects to improve in the third quarter. Nor do the metal stampers, hot-rolled fabricators, spinners, slide formers and roll formers expect prices of their key...