Manufacturers: Raw Material Prices and Inventory Turnovers Up; Operating Capacity Down

John Wolz

Inventory turnovers were up for fastener manufacturers in 2002, but percentage of operating capacity headed down. The foreboding key number was the FIN Survey Raw Material Price Index reaching a new high.
� Inventory turns rebounded for 2002. The 6.1 comes after dropping to 4.7 for 2001. The highest in the seven years manufacturer turns have been monitored in the FIN Survey was 6.7 just two years ago, but that plunged in 2001 to its lowest point.
� At 64.6% fastener manufacturers were operating at the lowest level of capacity in the nine years it has been measured. Peaking at 79.6% in 1996, the number had dropped to its previous low of 68.7% for 2001.
� The troublesome rising number for fastener manufacturers is the raw material price index jumping from 2.8 for 2001 to 3.8 for 2002. Manufacturers indicate they aren�t expecting relief in 2003, with a 3.7 projection for the next six months.
Despite raw material prices rising, a 58.3% majority was not able to increase the prices of fasteners they sell, and 54.2% anticipate no change in the next six months.
Though 20.8% did get price increases during 2002, that was nearly offset by 18.8% receiving lower prices for their product. One-quarter of fastener manufacturers predict they will get price increases during 2003, and only 6.3% anticipate price cuts.
How many inventory turnovers did you have in 2002?
Inventory Turnovers

How does your curent raw material inventory compare with a year ago?
Raw Material Inventory Index

Raw Material Price Index

Finished Goods Index

At what percent of capacity did you operate in 2002? At what percent of capacity do you anticipate operating in 2003?
Operating Capacity

What raw materials are currently difficult to obtain?
1038 and 4037, 303/304 stainless steel, 304 and 316 stainless steel domestic, A-286, brass, high carbon materials in low tonnage, higher carbon flat rolled steel, medium carbon (flat) coil, nickel alloys, square bars, hexagonal bars in all materials, specialty steels, 4130 stainless steel big diameter, stainless steel and steel.\ �2003 FastenerNews.com