Buyers angry at suppliers, prices
Staff -- Purchasing, 3/4/2004 2:00:00 AM
Costs of raw materials are rising much faster than end-product prices, and obtaining sufficient quantities is becoming difficult. Seventy-five percent of the metals buyers polled in February report higher prices compared to January. In fact, sales prices for such raw materials as steel, aluminum and copper are increasing so drastically, and deliveries are being delayed so severely, that buyers are angry.
PURCHASING magazine's monthly survey of metals buyers put the February Business Activity Index at 67.1 (on an index where 50 separates expansion from contraction). However, the index had been 70.5 in January. So, with the industrial economy wobbling a little, metals buyers in February were backing off earlier plans to buy more steel, aluminum and copper mill products over the next 90-days.
The plan-to-purchase index at metal cutting, processing and forming firms was 81.2 in January—the highest since this survey question was initiated in May 2001—but it slipped to 80.7 in February. However, some caution was evident in buyers' attitudes toward a buildup of production metals inventories, as the index crept into a growth mode with a reading of 50.4 for the first time since the summer of 2000, then slipped back to 49.3 in February.
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