Posted: July 22nd, 2015 | Author: | Filed under: Introducing ProPurchaser | No Comments »

This blog contains information and ideas to help you prepare for negotiations with suppliers. Watch this video to learn more about ProPurchaser’s CORE PRACTICES:

 

View more videos at ProPurchaser.com or start reading the blog:

When Warehousing Goes Green

Posted: May 28th, 2016 | Author: | Filed under: CSR in purchasing, Energy, Gem, Greening the Supply Chain, What's Happening in Our Profession | Tags: , | No Comments »

Green buildingWhen considering the greening of any supply chain it is easy to ignore the impact of warehousing and distribution centres.
Transport miles are often shown to potential consumers, but what about the environmental cost of storage?

Understandably, the main focus in distribution centres is often the streamlining of the distribution process. This video of the Ocado distribution centre makes this optimisation geek very excited. But it is not difficult, and not necessarily expensive, to improve the green credentials of your warehousing.

Read the rest of When Warehousing Goes Green » » »


TOKYO RUBBER ENDS UP, AFTER HITTING 2.5 MONTH LOW

Posted: May 26th, 2016 | Author: | Filed under: Asian Markets, Japan, Negotiating with Suppliers, NEGOTIATOR'S TAKE, Rubber, Shanghai Futures Exchange, SICOM, Supplier's costs, Tokyo Commodity Exchange TOCOM, US Dollar, USA, Yen | Tags: , , , , , , , | No Comments »

 

NEGOTIATOR’S TAKE:  Rubber is down 20% over the last 4 weeks: time to renegotiate tires and other rubber-based products.

 

06.25.16 – Tokyo

Benchmark Tokyo rubber futures ended higher on Friday, erasing earlier losses on the back of a weaker yen against the dollar, but posted a drop of 5.8 percent for the week.  Tokyo Commodity Exchange (TOCOM) futures, which set the tone for tyre rubber prices in Southeast Asia, declined for a fourth straight week, and have fallen 20.5 percent from a near nine-month high of above 205 yen on April 27 amid worries about waning demand in the world’s top consumer China, brokers said.

 

The Tokyo Commodity Exchange rubber contract for October delivery finished 1.3 yen higher at 163.1 yen per kg, after falling more than 2 percent to 158 yen earlier, the lowest since March 2.

 

“TOCOM and Shanghai have fallen on each other’s declines recently,” said a source with a Tokyo-based broker. “With the decline in Shanghai futures continuing, rubber futures may come under further pressure next week.” The US dollar edged higher to around 110.12 yen in the afternoon as investors awaken to the risk of a hike in US interest rates as early as next month.

 

The most-active rubber contract on the Shanghai futures exchange for September delivery fell 155 yuan to finish at 10,860 yuan per tonne. The front-month rubber contract on Singapore’s SICOM exchange for June delivery last traded at 128 US cents per kg, down 1.5 cents.

 

SOURCE: Reuters

 


WELCOME CHEAP CHINESE STEEL, DUMP TARRIFS

Posted: May 24th, 2016 | Author: | Filed under: Asian Markets, China, Cold-rolled Steel Sheet, Economic Barometer, Economic Indicators, Negotiating with Suppliers, NEGOTIATOR'S TAKE, ProPurchaser Insight, Stainless Steel, Steel, Supplier's costs, US Dollar, USA, What's Happening in Our Profession, Yuan | Tags: , , , , , , | No Comments »

 

PROPURCHASER INSIGHT:  If you’re not happy with today’s Steel prices, you might want to read this article….nothing is simple. Read the full article HERE.

 

06.22.16 by Boston Globe Columnist Jeff Jacoby

China produces more than 820 million tons of steel per year, of which about 100 million tons are exported and sold at a discount overseas.  Only about 3 percent of those exports go to the United States, but American steel producers bristle at the competition.  So in keeping with the time-honored practice of the US steel industry — “the backbone of American manufacturing,” as it proudly calls itself — domestic producers are rising to the challenge.

Are they doing so by making their operations more efficient?  By improving the quality of the steel they sell?  By cutting their prices to maintain market share in the face of a tough competitor?

Not exactly.  They’re getting the federal government to punish American consumers.

“The United States on Tuesday said it would impose duties of more than 500 percent on Chinese cold-rolled flat steel, widely used for car body panels, appliances, and in construction,” reported Reuters. “The Commerce Department said the new duties effectively increase more than five-fold the import prices on Chinese-made . . . steel products.”

American steel producers complain that their counterparts in China are dumping cheap steel on the US market, benefiting from Chinese tax subsidies to undercut other companies’ prices.  Because of these “unfairly traded imports,” lament Thomas Gibson and Chuck Schmitt of the American Iron and Steel Institute, some US steel mills have had to be shuttered, and 12,000 steel-making jobs were lost during the past year.

It is always painful when workers are laid off and once-thriving facilities have to be closed.  But the steel industry is far from unique.  The US economy creates and destroys millions of jobs every year.  No industry is exempt from the upheaval, retrenchment, or losses caused by changes in technology, trade, and consumer demand.  The digital revolution has decimated once-formidable companies and careers in fields as different as journalism, photography, tax accountancy, and recorded music. Would anyone argue that the government should have suppressed the Internet in order to preserve the employment and production patterns of the 1980s?  Should the Commerce Department have imposed taxes of 500 percent on e-mail services and word-processing software to preserve the viability of typewriters and stenographers?

….Read the rest of this ProPurchaser sourced article, HERE.

 

AUTHOR: Jeff Jacoby | Follow Jeff on TWITTER

SOURCE: The Boston Globe

 


Don’t Sweat the Details – It’s the Direction that Counts

Posted: May 18th, 2016 | Author: | Filed under: Best practices, Gem, Negotiating with Suppliers, What's Happening in Our Profession | Tags: , , , | 1 Comment »

DirectionYears ago, while working for Green Giant, I phoned our steel can sales rep to ask for a 4% reduction. We had information suggesting steel prices had fallen 8%.
He certainly wasn’t very happy and, as expected, argued against any decrease.

“Are you saying you’re still purchasing steel at the same price as before?” I asked. “That would be surprising.”

“Um… no, of course not”, he said, “but look – let me get back to you.”

To learn more, follow the Negotiating Nugget on Propurchaser.


COPPER PRICES POST STEEP WEEKLY LOSS ON STRONGER GREENBACK

Posted: May 16th, 2016 | Author: | Filed under: Asian Markets, China, Copper, Economic Indicators, Negotiating with Suppliers, NEGOTIATOR'S TAKE, US Dollar, USA, Yuan | Tags: , , , , , , , , | No Comments »

 

NEGOTIATOR’S TAKE: Falling Copper costs means opportunities to negotiate lower prices for electric motors, wiring, and plumbing components.

 

05.13.16 – Copper loses 3.7% of its value

COMEX Copper futures ended Friday’s session nearly unchanged at $2.074 per lb., but over the week, the commodity lost 3.7% of its value as a climbing greenback and new economic malaise in China dented demand for the metal.

The US dollar has been on an upward trajectory so far in May, and this has put all dollar-denominated commodities under pressure.  When the US dollar ascends, it makes copper relatively more expensive for would-be international buyers.  The US dollar has garnered support from some positive economic data, which supported that the world’s largest economy is on the right track.  The latest data included the largest monthly retail sales increase in a year (April), while April consumer sentiment was the best since last June.

 

New loans issued in China a contributor

The metal’s downside was given further impetus from some disappointing economic data from top consumer China. The latest data showed a sharp decline in new loans issued last month.  In April, the People’s Bank of China issued 55.6 billion yuan worth of loans, well below the 900 billion yuan economists were expecting and a sharp decrease from the prior month when 1.37 trillion yuan of new loans were issued.  There is a whole batch of Chinese economic data due in the coming days including fixed asset investment data, industrial production, and retail sales all due.  Copper could see a great deal of action on Monday when trading resumes.

On the London Metal Exchange, Friday in itself was a better day for the commodity with copper futures rebounding after touching a 2-1/2 month low.  LME copper ended Friday’s session fractionally higher at $4,627.50 per ton after touching $4,594 per ton, its lowest price point since February 25. LME copper has already declined 8% in May.

 

SOURCE: Economic Calendar.com

AUTHOR: Donald Levit

 


CHINA COMMODITIES SELLOFF DEEPENS AS STEEL POSTS WORST WEEK SINCE 2009

Posted: May 11th, 2016 | Author: | Filed under: Agricultural, Asian Markets, China, Chinese commodities, Coking Coal, Commodities, Cotton, Dalian Commodity Exchange, Eggs, Iron ore, Negotiating with Suppliers, NEGOTIATOR'S TAKE, Shanghai Composite Index, Soybaens, Steel, Yuan | Tags: , , , , , , , , , , , , | No Comments »

 

NEGOTIATOR’S TAKE: Sharp fall in Chinese metals likely means lower prices globally.

 

May 2016 – Shanghai – Commodity slide spills over into stocks

Chinese commodities prices spiraled lower on Friday, with steel futures suffering their worst week since 2009, as more money flowed out of markets whose surge two weeks ago unnerved global investors and forced regulators to step in to restore calm.

 

Indicating how authorities may now be alarmed after a collapse in volumes and prices, the Dalian Commodity Exchange on Friday said it will cut some trading fees on contracts such as iron ore and coking coal.  The commodities slide spilled over into stocks, with the Shanghai Composite Index ending down 2.8 percent, its worst day since February, as commodity producers fell.  Commodities linked to China’s steel sector, which led the mid-April rally, were the hardest hit on Friday, on worries that demand in the world’s biggest steel consumer could soon wane. The selloff spread to agricultural products including soybeans, eggs and cotton.

 

Prices pulled below mid-April levels

Some traders were concerned that China’s interest rate easing cycle could be over even as optimism about prospects for the world’s No.2 economy faded.  The retreat pulled prices of many of the commodities below levels in mid-April, when a buying frenzy, pinned on retail investors, bloated volumes and drew comparison with the boom-and-bust cycle in China’s stock markets last year.

“It’s panic now and capital is flowing out of commodities markets amid a cautious outlook on the economy,” said a trader at a fund in Shanghai. . . . Read the rest of this ProPurchaser sourced article, HERE.

 

SOURCE: Hellenic Shipping News Worldwide | Reuters

ARTICLE AUTHOR/REPORTING: Pete Sweeney (Shanghai)

EDITOR: Ed Davies


PLANT TOURS ARE WORTH EVERY MINUTE

Posted: May 8th, 2016 | Author: | Filed under: Gem, What's Happening in Our Profession | Tags: , | No Comments »

Plant, factory tourThe struggle to find “good fit” suppliers never ends. And finding the right suppliers has never been more important than right now. The global recession has put many companies’ very survival at stake.
How do you make sure – really sure – that your supplier is capable of going the distance providing you with the price, quality and service that your company and your customers demand?

Well, you could take the sales rep’s word for it. But we strongly suggest you see for yourself.

Simple as it sounds, an actual tour is the best way to gather reliable information about your supplier‘s all-important cost drivers, quality commitment and service culture.

Read the rest of PLANT TOURS ARE WORTH EVERY MINUTE » » »


The U.S. Natural Gas Story in 15 Charts

Posted: April 28th, 2016 | Author: | Filed under: Energy, Gem, Natural Gas | Tags: , , , , | No Comments »

Natural gasThe story of U.S. natural gas gets referenced a lot but you may not know whats going on. Here are 15 charts that tell the story of the U.S. natural gas market which has been completely changed by the rise of horizontal drilling and hydraulic fracturing.

In the past few years, new technologies and cheaper costs allowed producers to access gas trapped in parts of the U.S. previously considered unreachable.

Read the rest of The U.S. Natural Gas Story in 15 Charts » » »


IRON ORE PRICES HIT A 16-MONTH HIGH, STILL RISING

Posted: April 26th, 2016 | Author: | Filed under: Asian Markets, China, Chinese commodities, Commodities, Construction Materials, Iron ore, Metals, Negotiating with Suppliers, NEGOTIATOR'S TAKE, Steel, Supplier's costs, What's Happening in Our Profession, Yuan | Tags: , , , , , , | No Comments »

 

NEGOTIATOR’S TAKE: China’s economic growth is once again pushing up metal prices.

 

If you had been asleep for the last month, woke up this morning and picked up a paper you could be forgiven for thinking you had been transported back to 2009.  Chinese construction is up 20% last month year-on-year, Chinese loans were up 41% last month, the government is raising exchange-margin requirements from 5 to 8% to dampen rampant speculative behavior, should we go on?

 

Is it 2009 again?

Turn to commodity prices, copper is up 20% this quarter, zinc is up 22%, iron ore has nearly doubled, hitting $70 per metric ton and a 16-month high according to Bloomberg.  Steel mills in China, encouraged by rising prices and strong construction demand, churned out over 70 million metric tons last month, nearly equivalent to the entire U.S. annual output.  Sound like the start of the super cycle to you?

Iron ore producers are trying to take credit for cutting back on expansion of iron ore mines and are indicating they would limit production to support prices but in reality, they are tinkering at the margins.

 

Is stimulus investment by Beijing temporary?

Price gains, flat-footing nearly all of us, have been driven by a sugar rush of stimulus investment by Beijing, the question (the same one we faced back in 2009 it must be said): is this temporary to provide some short-term relief or is it medium- to long-term stimulus to give the steel industry time to restructure?

In 2009 it went on for more than two years, at present we have no way of knowing how long Beijing will keep this up but if you ask Goldman Sachs its analysts say the iron ore price is coming back down.

Read the rest of this ProPurchaser sourced article, HERE.

 

SOURCE: Shanghai Metals Market | Metal Miner

ARTICLE AUTHOR: Stuart Burns (Editor-at-large)


The Marketplace and the Five-Hundred Pound Gorilla

Posted: April 18th, 2016 | Author: | Filed under: Best practices, Gem | Tags: | 1 Comment »

Five-hundred pound gorillaPurchasers know how hard it can be to convince our superiors & peers that we are doing a good job.
We struggle with Suppliers all the time, arguing, calculating, cajoling, pushing back to get the lowest possible all-in costs – and still we sometimes go over budget!

Does this mean we are doing a poor job? Probably not!

via The Marketplace and the Five-Hundred Pound Gorilla on Propurchaser.


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