OT Plastics

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I manage an extrusion plant where we utilize both polypropylene and nylon 6 in the process. With the ongoing rise in crude and, if I am correct, the diversion of crude into the heating oil and other markets to take up the slack in shortages, does anyone out there have any idea what or how the plastic producers are doing?

We have had a 10 cent increase over the past year that we sucked in until we couldn't stand it no more and had to pass this cost on to the customers. Just got notified to expect a 5 cent increase in our nylon chip.

This is the only place that I have been able to get some good information on what is really going on in the world, any ideas where I might be able to go from here. Our suppliers are remaining tight lipped about anymore price increases. Thanks to all

-- idunno (idunno@whoknows.com), February 02, 2000

Answers

I suspect you might get some hood answers from the Pet roleum Board.

It was started by a poster from this Forum by handle of Downstreamer, he started a board dedicated to oil and oil futures.

Best I can read into this is that truckers are starting to complain about the increased cost and will be passing on increases or shutting their rigs down for awhile. Canadian truckers have threatened to strike if they can;t get price increases. The link for this info is on Downstreamer's Petro Board.

Good luck.

-- Bill P (porterwn@one.net), February 02, 2000.


Typo GOOD ANSWERS!

-- Bill P (porterwn@one.net), February 02, 2000.

I dunno-

If the supply chain follows the '73 recession model, then we can expect price increases in all raw manufacturing products. As a purchasing agent in that period of hyper inflation, I can attest to the need for secondary sources of supply ASAP. From my recollection of interconnectedness of supplies, we should see price increases in copper, aluminum, and all the products that use these commodities. Many, if not most, of the processing materials (ie bauxite) become hard to get or are inflated in price due to the increased costs brought on by the increase in oil prices. OEM lead times may increase by 100 - 500 %. Of course this leads to unemployment along similar bell curve lines.

It's going to get crazy again. "CRRRrrrraaap!" Sure glad I have a years worth of preps for shake ups/downs/outs. And seeds to grow another years worth if necessary. (;^}`

-- Michael (mikeymac@uswest.net), February 02, 2000.


Oops should have read ...all raw materials used in manufacturing

-- Michael (mikeymac@uswest.net), February 02, 2000.

Bill -

I thought it was a good analogy. Answers from *under the hood*, or in the (neighbor)hood , so to speak. [*0}`

-- Michael (Mikeymac@uswest.net), February 02, 2000.



Very familiar with the long term affects of increases in costs for raw materials. Most of my suppliers (not just resin) have increased their costs on average of 5 to 10 cents for their products, especially in the 4Q99.

We run a very thin profit margin on all of our products so that any increase in raw materials cost has to be forwarded on to the consumer immediately. Same goes for transportation, we cannot absorb any more increases.

While I am out in the nether world picking brains, has anyone heard anything about the rails? The majority of the raw materials that I use come in on rail (CSX). All you guys are amazing, thanks again.

-- idunno (idunno@whoknows.com), February 02, 2000.


nether world?

oh darn, my cloven hooves and tail are showing again.

anyone smell the sulfur?

Seriously, there hasn't been much on rail. For a while people thought trains were less frequent, but haven't heard any of that lately.

Hoo boy, if you rely on trains and on diesel trains, your shipping costs may go through the ceiling. But, other than that, nothing.

-- (4@5.6), February 02, 2000.


Benjamin.......one word, PLASTICS!

-- (siskel@ebert.thumbs), February 02, 2000.

Plastics use refined oil as well as natural gas. Since there are all sorts of allocation issues going on and since heating oil(s) and fuel are being affected I had been wondering about chemical plants which produce plastic for fabricators. Glad you brought this up.

If the reserves get drained for the next four to six weeks I would think that there may be some starvation of supplies to plastics manufacturors in favor of keeping homes warm and electricity flowing.

It seems the possiblity has increased that the plastics sector may get reduced allocations and price increases. You probably don't want to wait so long to pass increased costs to buyers. Also you might consider offsetting business losses with futures contracts for raw materials.

-- ..- (dit@dot.dash), February 03, 2000.


I am not as familiar with the upstream side of the business as I should be. Too busy maintaining downstream side.

Haven spoken to one of my suppliers (kinda rhymes with onion car- ride) b4 the end of the year in reference to his price increases, he gave me the nickel tour of how the markets determine allocation and thus high supply=low cost and low supply=higher cost.

Again, we held the cost increases to ourselves given that our suppliers (and their competitors) were looking at bringing more capacity on line and forcing the price down. But,IMMHO, if more of the crude stream is forced to move into the creature comfort markets and less of it is in the plastics and commodity markets, it will not make any difference how much capacity is on line.

I am still curious as to if anyone in this forum has any idea where I might get some good intel on what is happening with the plastics producers. Mum is the word of the day with my suppliers.

PS idunnoette, procurement mgr for a sub-supplier with a customer who has a name that reminds you of how the water does when you flush the toilet says that they are still having problems with ordering, scheduling, and shipping. Thanks for listening.

-- idunno (idunno@whoknows.com), February 03, 2000.



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