What's Happening in Markets

Staff -- Purchasing, 10/7/2004

• United Parcel Service and FedEx now have 18 weekly cargo service flights between the U.S. and China under an expanded air-services agreement reached this summer between the two nations. Polar Air Cargo received nine new weekly flights under the agreement, and Northwest Airlines received six additional flights, bringing its total to 18 (not counting cargo shipped on its China-U.S. passenger flights).
• International Truck and Engine is marketing the world's largest production pickup. The heavy-truck firm thinks industrial, commercial and construction fleet buyers are pining for even bigger trucks than today's hefty sport-utility vehicles and full-size pickups. Called CXT, for commercial extreme truck, the new vehicle dwarfs the beefy Hummer H2 sport-utility pickup and totes five times the cargo weight of the H2.
• Auto dealers still have excess inventory of 2004 models despite hefty clearance sales the past two months. "Automakers have begun to see unwanted inventories accumulate," says analyst Bob Gay at Commerzbank Securities. Sales estimates for the year have been downgraded to 16.6 million cars and light trucks with Detroit's market share around 60%. That's why he doesn't expect to see short-term surges in automotive output.
• North American structural wood panel production is expected to finish 2004 at 41.7 billion square feet, exceeding 2003 production by 2%, or 900 million square feet. According to the latest forecast by APA, the Engineered Wood Association, that would set a new record for the third consecutive year for plywood and oriented strand board, or OSB.
• Eastman Chemical predicts that demand for a polyester resin used throughout the world to make soft drink bottles will exceed supply by 2006, and it plans to meet that need by building a $100 million plant in Columbia, S.C. The 350,000 metric-ton plant will feature process innovations expected to allow Eastman to create new copolyester products for specific markets.
• World demand for aluminum now is expected to rise 8.3% this year to 30 million metric tons, with supply increasing 5.5% to 29.4 million metric tons, projects analyst Victor Lazarovici at BMO Nesbitt Burns' offices in New York. He says this bullish outlook "is predicated on continued demand growth in China of 18%."