Also look for a moderate amount of price deflation over the rest of this half--and for most of the second half
By Staff -- Purchasing, 3/12/1998
Also look for a moderate amount of price deflation over the rest of this half--and for most of the second half. Here's what to expect over the next few months in some of the key commodity areas:* Steel. Plenty of steel available--off-shore, in domestic inventories, and from new capacity coming on stream. Moderate price declines are already showing up. More expected in the second half of the year. Sheet prices--especially galvanized--likely to be hardest hit.
* Aluminum. Demand in North America and Europe is relatively strong. Still, there's more metal around than the market can digest. As a result, there's not likely to be any change in prices--up or down--before the second half.
* Copper. Prices will continue to be under pressure, despite relatively brisk U.S. demand. Price for cathode expected to bump around in the 85(cent)-90(cent)/lb range.
* Lumber. Traditional seasonal price jumps already are starting to hit the market. More increases are almost certain to follow throughout the building season, but they will be mild compared with the past several years.
* Paper. Mixed picture demonstrated over the past several months is likely to continue. Publication papers are under severe pressure, while groundwood papers are relatively strong. In between, newsprint increase of 2.5% is under attack, packaging grade papers are likely to rise another 1%, and uncoated freesheet is likely to stay where it is for several more months.
* Chemicals. Don't be surprised to see average product prices on industrial organic chemicals drop another 1%-2% over the next six months. Slight weakening in demand and very weak crude prices are major factors in the market projection. Inorganic chemicals prices look to register a 0.5% gain this quarter, but will likely lose it in the second.
* Plastics. Polyethylene and polypropylene tags are likely to remain weak through both the first and second halves of the year.
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