High prices impact buying plans for resins
David Hannon -- Purchasing, 7/13/2006 2:00:00 AM
The continued price hikes in plastic resins are impacting buying plans in mid-2006. In Purchasing's most recent business survey, 57% of buyers said they saw plastic resins increasing in price, up from 50% the month before. Fifty-five percent expect to see further resin price increases in the next three months.
Buying plans have been clearly impacted by the pricing trends. In May, a mere 7% of buyers polled said they planned on decreasing their spend on resins in the coming month. By June, that had jumped to 30%. Similarly, for molded plastics, 24% of buyers polled planned to decrease spending in June, an increase from the 14% in May.
"We've seen resin-based plastics increase for the first time since the beginning of the year," says a purchasing manager at a Kansas manufacturer.
"Resin prices have increased 7¢/lb recently," says the purchasing manager at a Southeastern paint maker. And the senior procurement manager at a major East Coast pharmaceutical firm says "prices for plastic resins are on the rise, particularly those using ethylene."
"We've seen plastic price increases anywhere from 5-12% this year," says Ben Shepherd, a buyer with the Bergquist Co., a thermal equipment maker in Minnesota. "The result has been a 1% increase in our total overall costs."
Shepherd says Bergquist is working to qualify new suppliers and negotiate prices with certain suppliers, but that requires more time and resources, which increases overall costs.
Leadtimes have not been an issue for Bergquist. "We haven't seen any energy surcharges on our invoices, but it's definitely incorporated into these price increases. I think we're in for a long, bumpy ride."
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