Chem recovery gathers steam
Staff -- Purchasing, 4/1/2004 2:00:00 AM
The manufacturing recovery continued to accelerate in the first quarter of 2004 with strong participation from the chemicals sector. Fifty-six percent of chemicals buyers surveyed by PURCHASING in both February and March say incoming orders are rising. That pushes up the Business Activity Index for chemicals-consuming companies to just shy of 70, bringing the sector, which had lagged behind, into line with other growth sectors like metals and high tech.
The Forward Demand Index for chemicals-consuming companies, which tracks the trend in 90-day volume purchase plans among chemicals buyers, backed off a bit in March, but remained quite strong at 72.9.
Purchasing's Chemical Price Index (1992=100), after rising strongly in the early part of 2003, has remained stubbornly flat (even eroding a bit) over the past six months. That is keeping a lid on inventories. While chemicals buyers say product availability is tightening up, the latest survey finds no noticeable shifts in buyers' stockpiling strategies, suggesting that supplies of chemicals and resins remain generally plentiful.
There is some chatter in the March survey concerning strong upward pricing movement for plastic resins, but the talk is, by no means, widespread. Latest Business Survey data from PURCHASING also shows resins leadtimes backing off somewhat from highs reached in 2003. Buyers do cite spot problems sourcing synthetic rubber, acrylic monomers, and some etching solutions. Also, custom and specialty valves receive several mentions on the short supplies list.
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