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:

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 » » »


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.


TOCOM HITS 8-MONTH HIGH

Posted: April 13th, 2016 | Author: | Filed under: Asian Markets, Brent Crude, Commodities, Crude Oil, Energy, Japan, Rubber, Tokyo Commodity Exchange TOCOM, US Dollar, USA, What's Happening in Our Profession, Yen, Yuan | Tags: , , , , , , , , , , , , | No Comments »

 

NEGOTIATOR’S TAKE: Higher Rubber costs mean upward price pressure on tires, industrial hoses, etc.

 

04.12.16 – Tokyo

Benchmark Tokyo rubber futures extended gains to hit an 8-month high on Tuesday as firmer prices of oil and other commodities fed appetite for risk, while China’s solid auto sales in March bolstered hopes of a pick-up in demand in the world’s top buyer.

The Tokyo Commodity Exchange (TOCOM) rubber contract for September delivery <0#2JRU:> finished 3.8 yen, or 2.1%, higher at 189.0 yen (US$1.75) per kg, after a 4.6% jump the previous day.

 

Futures hit highest since August 2015

The TOCOM futures, which set the tone for tyre rubber prices in Southeast Asia, earlier touched a high of 190.2 yen (US$1.76), surpassing last week’s high of 188.4 yen and hitting the highest since August 18 last year.

“Bullish trend in oil, gold and other commodities increased investors’ appetite for risk and prompted short-coverings and fresh buys,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.

 

U.S. crude futures holding above $40 per barrel

Oil prices were stable on Tuesday, with US crude futures holding above US$40 per barrel and Brent approaching US$43 ahead of a meeting of major producers to discuss freezing output levels to rein in ballooning oversupply . . . . Read the rest of this Propurchaser sourced article, HERE.

 

SOURCE: The Edge Markets [.com]

ARTICLE AUTHOR: Reuters

 


A Supplier’s Advice for Purchasing Custom Tradeshow Exhibits & Environments

Posted: April 8th, 2016 | Author: | Filed under: Best practices, Gem, Negotiating with Suppliers | Tags: , , , , | No Comments »

3D ExhibitsDear Purchasing Professional,

We usually don’t get to speak with you directly when we respond to an RFP. But if we could, this is what we’d say.

We’d like you to know that to get the best value when buying custom tradeshow exhibits you need to take a slightly different purchasing approach. These products  require creative thinking (like advertising), and work best when uniquely crafted to fit your company’s needs.

Read the rest of A Supplier’s Advice for Purchasing Custom Tradeshow Exhibits & Environments » » »


Use labor productivity to drive down purchase costs

Posted: March 29th, 2016 | Author: | Filed under: Best practices, Gem, Negotiating with Suppliers | Tags: | No Comments »

Labor productivity Suppliers often use wage increases to justify nudging up prices each year, usually 1 or 2%. And it’s hard to argue: – seems reasonable, and it’s less than inflation.
But wages aren’t the real issue – labor costs are.

And the reality is that the average cost of a ‘unit of labor‘ is about the same today as it was 5 years ago.

Read the rest of Use labor productivity to drive down purchase costs » » »


CHINA LABOUR COSTS ONLY 4% BELOW U.S.

Posted: March 28th, 2016 | Author: | Filed under: Asian Markets, China, Labor, Labour Costs, Manufacturing, NEGOTIATOR'S TAKE, USA, What's Happening in Our Profession, Yuan | Tags: , , , , , , , , , | No Comments »

 

NEGOTIATOR’S TAKE:  With China’s labor advantage almost gone, you might want to think about bringing manufacturing work back to the U.S.

 

03.01.16 – Only a 4% gap between costs

A recent report estimates that China’s effective labor costs are only slightly below those of the U.S.  The analysis by U.K. consulting firm Oxford Economics said that rising wages in China and increasing productivity among U.S. workers led to just a 4 percent gap in costs between the world’s two largest economies — despite the nations’ currency values largely going in opposite directions of late.

 

U.S. output per worker in global lead

Economic sluggishness in China curbed the value of the yuan in recent months as the dollar strengthened.  Over the longer term, however, the growth in the yuan tended to outpace the dollar and increase China’s labor costs at a faster pace.  In addition, though worker productivity in China doubled in recent years, the growth in U.S. output per worker eclipsed other industrialized nations.

 

Is the age of the low Asian wage at an end?

The analysis, CNN reported, noted that U.S. productivity remained nearly double that of China.  A flexible American labor market and low energy costs also helped the U.S. compared to China.  Increasing wages in China are not a new phenomenon, and many observers suggested that an eroding wage gap between the two nations — when combined with other logistical benefits — would lead more and more manufacturers to resume U.S. operations.

 

Further appreciation of the U.S. dollar

Others, however, argued that producers are instead leaving China for lower-wage nations in Asia.  Oxford Economics analysts, meanwhile, warned that further appreciation of the dollar could erode the current parity between the U.S. and Asia, according to Bloomberg.  China also continues to maintain a sizeable trade surplus with the U.S.

 

SOURCE: Manufacturing.net

ARTICLE AUTHOR: Andy Szal | Follow Andy on: TWITTER

 

 


STEEL PRICES MOVE UP: COLD-ROLLED vs. HOT-ROLLED SPREAD INCREASES

Posted: March 23rd, 2016 | Author: | Filed under: China, Cold-rolled coil, Cold-rolled Steel Sheet, Construction Materials, Hot-rolled Steel Sheet, Industrial Metals, Negotiating with Suppliers, NEGOTIATOR'S TAKE, Steel, US Dollar, USA | Tags: , , , , , , , | No Comments »

 

NEGOTIATOR’S TAKE: Cold-rolled Steel prices continue to move up – read why.

 

03.23.16 – Weaker U.S. dollar; higher oil prices

Steel prices have been rising since February and, at the same time, we witnessed a broad recovery among industrial metals thanks, in part, to a weaker dollar and higher oil prices.

Steel prices are also getting a boost thanks to new anti-dumping determinations, a decline in US imports and a surge in iron ore prices.  It’s pretty normal to see sharp rallies in bear markets only to then see prices fall again.  Indeed, we just saw that pattern in steel prices last year.  It’s yet not clear how long this rally will last, but current macro-conditions will need to improve to make us think the rally is finally the one ending this bear market.

 

HRC-vs-CRC_optHRC vs CRC | Source: MetalMiner IndX.

 

Divergence between hot-rolled and cold-rolled

Meanwhile, looking at different steel products we are seeing an abnormal divergence between hot-rolled coil (HRC) and cold-rolled coil (CRC).  These two tend to move in tandem but lately we are witnessing CRC prices appear to be much stronger. The spread between CRC and HRC has increased to $170per standard ton, the highest since 2008.

 

CRC-HRC-price-spread_opt1CRC – HRC price spread |  Source: MetalMiner IndX.

There are some things happening in these markets that might explain why domestic CRC prices are rising much more than HRC prices:

 

CRC dumping margins

CRC products were hit with a super-high dumping margin of 265% from China, effectively shutting down CRC imports from the world’s most populous nation.  That is, in turn, causing a domestic price resurgence.  Meanwhile, HRC products have were also with a dumping margin but much lower and not from China.  This is also helping slow down HRC import volumes but not to the same extent as CRC.

 

Lead times

In addition, lead times for CRC are longer than HRC — meaning demand is stronger in general.  That helps provide price support (in theory, the longer the lead times the greater the demand).

While HRC pricing and lead times have lagged for cold-rolled and galvanized products, there are signs that HRC prices and lead times are beginning to move in an upward direction, at least in the short term.  Longer-term, anti-dumping and lead times might not be reason enough to expect higher prices in an oversupplied market.

 

SOURCE: Metal Miner

ARTICLE AUTHOR: Raul de Frutos | Follow Raul on: LINKEDIN

 


Corporate Social Responsibility in supply chains: an example of aluminum refining

Posted: March 19th, 2016 | Author: | Filed under: CSR in purchasing, Gem | Tags: , | No Comments »

Corporate Social ResponsibilityCommodity production in many parts of the world causes huge problems for local communities. Extractive industries located in areas with poor environmental protection and enforcement can be particularly damaging.

For example this contentious aluminum refinery in Niyamgiri, India: The battle for Niyamgiri

Should purchasers have a role in influencing supply chains by avoiding companies with dubious social and environmental ethics? Would this be interfering with domestic governance and development, or does CSR (corporate social responsibility) pave the way for this type of decision? Are purchasers in a position to obtain and evaluate the information needed to make those decisions?


CONTSTRUCTION MATERIAL PRICES CONTINUE FREE FALL IN FEBRUARY (2016)

Posted: March 16th, 2016 | Author: | Filed under: Associated Builders and Contractors (ABC), Construction Materials, Economic Barometer, Economic Indicators, Japan, Lumber, Metals, Negotiating with Suppliers, NEGOTIATOR'S TAKE, Steel, US Dollar, USA | Tags: , , , , , , , , , , , | No Comments »

 

NEGOTIATOR’S TAKE: Construction costs are falling – good time to renegotiate un-awarded projects.

 

03.15.16 – Washington, .D.C

Construction input prices fell for the eighth consecutive month during February 2016 according to an analysis of the Bureau of Labor Statistics Producer Price Index released today by Associated Builders and Contractors (ABC).

Construction input prices fell 0.6 percent on monthly basis in February and 3.7 percent on a yearly basis.  Inputs to nonresidential construction fell even further, declining 0.7 percent from January 2016 and 3.8 percent from February 2015.  Prices for eight of the 11 key inputs declined on a monthly basis in February, while nine of the 11 key inputs experienced year-over-year price declines.


CHINA 2016 STEEL PRICES FALL TO 10%: STANDARD & POOR’S

Posted: March 15th, 2016 | Author: | Filed under: Asian Markets, China, Cold-rolled coil, Construction Materials, Hot-rolled Steel Sheet, Malaysia, Metals, NEGOTIATOR'S TAKE, Stainless Steel, Standard & Poor's, Steel | Tags: , , , , , | No Comments »

 

NEGOTIATOR’S TAKE: Chinese Steel prices are under downward pressure; this is likely to keep components sourced from China competitive.

 

03.15.16 – Singapore

The average price for steel in China this year could drop 10 percent from 2015 on soft demand and as Beijing’s pledge to cut excess production is unlikely to reduce surplus supplies in the short term, credit rating agency Standard & Poor’s (S&P) said on Tuesday.  Chinese spot steel prices which rose to multi-month highs last week, fell this week after government data showed a drop in output in the first two months this year.  China’s steel demand remained weak as property developers more focused on de-stocking instead of buying land or building new houses, May Zhong, a director of corporate ratings at S&P said at a seminar.

 

Local government concerns slow production cuts

Even as the central government has pledged to cut its steel production capacity by 150 million tonnes per year (tpy) in the next three years, Zhong said implementation could be slower than expected due to local governments’ concerns about social stability, job and tax revenue losses.

“We are still expecting some new capacity to come online in China which means that the net capacity reduction, … (or) the magnitude will be insufficient to improve the supply-demand dynamic in 2016,” Zhong said.  China is expected to add new steel production of about 10 million tpy of new capacity in 2016-2017, she said.

 

SOURCE: Reuters

REPORTER: Florence Tan | Follow Florence on: LinkedIn

EDITOR: Michael Perry | Follow Michael on: LinkedIn

 


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