INVERTO Raw Materials Study 2015 in cooperation with the trade journal Handelsblatt
How effectively does raw materials procurement handle the risks of exchange rate fluctuations?
This year, exchange rate fluctuations are the main factor affecting the turnover of the companies surveyed. At the moment, they are more influential than both economic uncertainty and increased competition. Uncertainties regarding economic development were a particular issue in 2013 when raw materials markets had relaxed, whereas increased competition was seen as a dominant factor in 2014.
Due to the weak euro and already low raw materials prices, an end to the current low-price phase is widely expected. Only a small number of respondents expect the euro to strengthen in the near future.
The reduced availability of raw materials is being assessed by companies as similar to recent years. Plastics are being observed especially closely due to the expectation of supply shortages. In addition, the duration of fixed price periods has decreased, along with the readiness of suppliers to agree longer fixed contracts.
For the majority of companies, raw materials purchasing is extremely important. However, this year’s survey showed that there is still a lot of potential for more professionalisation in terms of raw materials buyers’ in-depth knowledge.
Abstract of the key findings
- The majority of companies and their upstream suppliers are expecting price increases in raw materials and an end to the current low-price phase
- The weak euro has exacerbated the effect of the expected increases in raw materials prices, as most raw materials are valued in US dollars
- The relevance of raw materials procurement is recognised – however, raw materials purchasers often lack the specialist knowledge to act proactively rather than reacting to price changes