Factors affecting product cost
Staff -- Purchasing, 9/4/2003 2:00:00 AM
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Polypropylene (PP) suppliers are looking to impose a 3¢/lb price hike and some sources indicate that polypropylene inventories are down more than 25% over the last three months. However, PURCHASINGDATA.COM's monthly commodity handicapping shows a distinct decline in the risk that transaction prices for polypropylene will rise. National average leadtimes for PP, which had stretched to 16 days a few months ago, are now easing. What's more, a large percentage of resins buyers, surveyed in August, believe prices could actually fall this month.
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Keystone Steel & Wire now is trying to adjust a price increase on low-carbon wire rod product to $30/ton in September because of higher scrap costs instead of the $15 other mini-mills have proposed. This action would boost list prices to $350, although the mills aren't getting current list of $320 because of weak demand. At midsummer, market prices for low-carbon wire rod were $300/ton.
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Microsoft has cut the price for its Office document, spreadsheet and presentation software suite used in Apple Computer's Macintosh personal computers from $499 to $399. Microsoft, which dominates the PC industry with its Windows operating system software, develops applications for the Macintosh.
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Corporate travel managers are looking for hefty discounts on employee business trips next year. Companies, spending at least 10% less on travel this year than they did last year want to repeat the cost-cutting in 2004.That's the word from the National Business Travel Association's survey of travel buyers who soon will open negotiations on 2004 contracts with big airlines, hotel chains and rental-car companies.
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Natural gas for September deliveries has risen past $5 per million British thermal units on the New York Mercantile Exchange. Reason: Factories have continued to burn gas this summer instead of even-costlier oil-based fuels. Meantime, energy companies have curtailed the amount of gas pumped into storage, and this has revived concern that reserves won't be large enough to prevent shortages—and prices in the $9-10 range—this coming winter.
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Prices for 300-millimeter blank wafers are expected to increase by 10% to $400 in the fourth quarter when demand for the large-diameter wafers is expected to be 50% greater than a year earlier. Asian foundries admit that manufacturing capacity has fallen behind the growth rate for demand by dynamic random access memory (DRAM).
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