Jason Sandefur

Raw material price increases slowed for fastener manufacturers in 2006, and stand far below the peak volatility of 2004. A majority anticipates raw material price increases in 2007.
The FIN Raw Material Price Index dropped to 3.6, down slightly from 3.8 for 2005 and well below the 4.7 high mark hit in 2004.
A 55.5% majority reported raw material price increases. One-quarter found prices the same and only 18.5% had prices drop.
Manufacturers are expecting steadier prices in 2007 as they pegged their outlook for raw material prices at 3.5. A year ago it was 3.6. A total of 48.1% expect “moderate” price hikes and 11.1% “strong” increases. Only 17.5% expect price cuts and 22.2% foresee prices remaining “about the same.”
Raw material inventory index edged down to 3.1 for 2006 from 3.2 a year ago. The high was 3.7 for 2004 and the low was 2.6 for both 1998 and 2001.
A total of 59.3% reported steel prices rose in 2006, while only 7.4% found steel price decreases and 18.5% responded “no change.” The average increase for 2006 was 16.2%.
With only 7.4% expecting steel price decreases in the coming year, a 59.3% majority anticipate the price of steel will rise.
Finished goods on hand edged up from 3.2 at the end of 2005 to 3.3 this year. The 10-year high was 3.5 at the end of 2004 and low was 2.6 at the end of 2001.
Nearly half reported their raw material inventory as the same as a year ago. Those finding increases in inventory (25.9%) outnumbered decreases (22.2%).
A 51.9% majority reported no problems obtaining raw materials in 2006, 37% “some difficulty” and 11.1% “significant difficulty.”
Inventory turnovers for manufacturers slipped to 4.9 from 5.3 for 2005. The range for 2006 was from 4 to 11.
The low was 4.7 in 2001 and high 6.7 in 2000.
Fastener manufacturers averaged operating at 70.2% in 2006, up from 67.3% the previous year. Manufacturers anticipate increasing operating capacity in the coming year to 72.1%. Individual projections ranged from 33% to 100%.
The high for the 12 years the question has been asked in the FIN Survey was 79.6% in 1996 and the low was 64.6% in 2002.
More than three-quarters (77.8%) of manufacturers were able to raise their selling prices in 2006, none acknowledge cutting prices and 22.2% held prices level.
And 70.4% anticipate raising prices again during the first half of 2007.
\ �2007 FastenerNews.com