Purchasing - June 03, 1999
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PURCHASING HOTLINE - Need timely commodity pricing data?
- Importers could have more trouble challenging Customs decisions
- Keep an eye on plan by Clinton administration to make importers pay for half of overhaul of U.S. Customs' computer system
- Plan on capital spending cooling off a bit this year
- Watch for new rules requiring non-polluting paint for industrial applications
- Don't forget that rates for mailing overseas just increased
- Is your MRO buying strategic--or do you just wing it?
- Most importers and exporters shouldn't count on major savings from Ocean Shipping Reform Act until late this year or even next year.
- Expect to pay more for polyethylene (PE) resins.
- Are you negotiating the best travel deal you can?
- Plan on 2.5% inflation this year, up from 1.6% last year.
- Don't expect Conrail's breakup to create chaos for shippers.
- Shippers should make sure that Conrail's name has been replaced on bills of lading and shipping instructions.
- Warning: It's not just your marketplace, your strategic plan, your track record, or your technology that determines your ability to grow--it's your people.
- Expect commodity pricing to begin recovery this year.
- Keep a close eye on legislation that would give states flexibility to increase allowable truck weights.
- Keep an eye on status of reformulated gasoline
- Plan on paying more to ship goods from Europe.
- Be sure to enter Purchasing's Welcome Booklet contest.
Economy - The nation's Gross Domestic Product (GDP) grew at a rapid 4.5% annual pace in first-quarter 1999
- The employment cost index rose a mere 0.4% in first-quarter 1999
- Latest Beige Book from the Fed finds a generally strong economy
- U.S. nonfarm business productivity grew at a stunning 4% annual rate in first-quarter 1999
- napm's index tracking commodity price activity rose to neutral (49.9) in April 1999
- Potential for a stock market correction remains the number-one threat to consumer spending growth
- Visit Purchasing Online (www.purchasing.com) to enter Purchasing's 1999 Crystal Ball
Markets - Boeing's commercial jet deliveries, expected to fall from 620 in 1999 to 480 in 2000, could be "flat to slightly higher"
- Demand for anti-friction and precision bearings remains strong among North American industrial OEMs
- South Korea's Hyundai Group will spend $2.15 billion to acquire LG Semicon
- Solutia will buy CPFilms, a maker of specialty film, from Akzo Nobel N.V. for $200 million.
- North America remains a hot sales market for cellular telephones
- The U.S. and United Kingdom this month will resume talks on a new aviation treaty.
- North American demand for mechanical and hydraulic components--used for everything from trains to airplanes--started to pick up
- Growth in demand for freight cars continues to rise
- Wireless phone and semiconductor maker Motorola has agreed to sell its semiconductor products business
- The International Trade Commission has rejected tariffs
- U.S. housing construction shattered forecasts last year; now it looks like the expected 1999 slowdown may not happen.
Prices - The prolonged slump in commodities prices will wane in 1999
- Demand for liquid hydrogen is near historical highs
- Seeking to gain market share in Type-409 stainless steel, Nucor has slashed product prices
- Led by GS Industries of Charlotte, N.C., wire rod makers are looking for another $20/ton price hike in July
- After languishing at the same price level for more than a year
- At least a dozen major North American polyethylene (PE) makers have joined Dow Chemical in seeking a 5¢/lb June price increase,
- Georgia-Pacific has told market pulp customers that June list for U.S. southern pine is $525/metric ton.
- BP Amoco concedes that downward price pressure (and lower margins and volumes) for chemicals may continue
- Domestic producers of expanded polystyrene (EPS) are attempting to boost prices 8¢/lb this month.
- Copper cathode may rebound slightly to 78¢/lb next year
- Published prices for wood pallets in the Northeast and Mid-Atlantic regions slipped 2% in April
- Average 1999 airfares on major North American airlines will be up 10% by year-end
- Oil prices have risen more than $6/barrel
- A flood of low-priced imports has forced bottle-grade polyethylene terephthalate (PET) resin down to 45¢/lb.
- Hotel rooms will cost more than last summer
- Newsprint prices have fallen $200/ton from their 1995-1996 peak of $730
- Structural lumber prices have risen 25%-30% since last spring, but they probably peaked in April.
- U.S. demand for copper- and aluminum-intensive air-conditioning equipment is expected to decline between 5%-10% this year
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