Elastochem Newsletter November 2008
Friday 7th November 2008

Hi there

Welcome to Elastochem's November Newsletter. We endeavour to keep you updated with the latest product developments, industry news, and events that may influence your business.

Also with Christmas fast approaching, we want to inform you of our warehouse close down dates.

Happy reading...

  • Elastochem Warehouse Christmas Close Down Dates
  • The Commodity Price Bubble - It Just Burst!
  • And What Does This Mean To Pricing From Elastochem?
  • Now for something a bit lighter

  • Elastochem Warehouse Christmas Close Down Dates

    That time is nearly upon us again, so it is timely to start planning ahead. As with most businesses, our warehouse will be closed for operation over the Christmas / New Year period.

    • Tuesday 23 December - Last deliveries
    • Wednesday 24 December - Collections close 12 noon
    • Monday 5 January 2008 - Resume normal trading

    If you envisage any delivery requirements over this period, please contact us so that we can make the necessary arrangements.

    The Commodity Price Bubble - It Just Burst!

    JUST a few weeks ago the main question about the economy was whether it would avoid recession. Now it is how deep will the downturn be. The region was already struggling before the financial crisis intensified in mid-September. GDP seemed set for a small drop in the third quarter. A reading of the runes suggests there is worse to come.

    But what if the recent plummet in the price of commodities is short lived? There is still an ongoing demand for oil, and the USD is getting stronger...

    And What Does This Mean To Pricing From Elastochem?

    Interesting times indeed! Due to the lack of demand for raw materials worldwide, we have seen an immediate drop in commodity resin prices in USD terms. This will translate into an easing of our ex- store stocks of Polypropylene and Polyethylene as we receipt new stocks into our warehouse.

    The delay effect of when you will receive these savings will be determined by when new stocks arrive. We have been actively reducing stock levels over the last quarter to ensure that we can bring in lower priced stock as soon as possible, and we believe we are positioned to further drop polypropylene prices in December.

    If you have specific requirements or new opportunites, please do not hesitate to call us to ensure you can remain competitive in these challenging times.

    For non commodity grades, including Santoprene, Elastochem have been negotiating with suppliers to reflect the drop in commodity pricing, and strength in USD. However there will be a lag effect with these type of products, as there was when prices increased over 2007 and 2008.

    However the effect of the weaker NZD will have a significant impact on stocks that are being receipted now and that are still on the water. Hence you may see an increase in the price of Santoprene, Escorez, and EEB resins over the short term. These increases will be grade specific, determined by the stocks being receipted against forecasts.

    We will however pass on any price decreases as they are negotiated. We will keep you updated with resin pricing in our future newsletters.

    Now for something a bit lighter

    Remember: If you don't vote you can't complain!

    Trusted Technologies With Value from:

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    • Dequest® Phosphonates
    • Solutia Specialty Chemicals
    • INEOS Melamines
    • Alpha Technologies
    • Welvic PVC

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