Customers try to time market bottom – US A Schulman

10 July 2012 17:37  [Source: ICIS news]

HOUSTON (ICIS)--Customers are attempting to time the bottom of the market, and they will not begin to restock inventories until they expect that prices for raw materials will spike, the chief executive of US plastics compounder A Schulman said on Tuesday.

A Schulman chief executive Joseph Gingo said raw materials have reached a bottom, but it is unclear exactly when prices will start to rise, so customers are holding off on restocking inventories.

“The view that’s being fostered among the purchasing community is the fall is when raw materials will rise,” Gingo said during an earnings conference call.

“It’s an issue of when in the fall and how much anticipation customers have of trying to buy before those price increases go in.”

Raw material prices will not go down much further, Gingo added.

“It’s an issue of how fast can our suppliers start to push those up,” he said. “Every month someone tells us they’re going to increase their price in ever produce we buy and every month they are not able to push it through because there is no demand or soft demand.”

By: Bobbie Clark
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