HOUSTON (ICIS) – US coatings chief PPG expects third quarter gross sales volumes to fall beneath expectations because of the provide chain disruptions, he mentioned on Tuesday.
Volumes are anticipated to be down $ 225 million to $ 275 million from what the corporate anticipated in the beginning of the quarter.
Gross sales volumes are impacted by:
- growing disruptions within the provide of uncooked supplies;
- additional cuts in buyer manufacturing as a result of some shortages of elements equivalent to semiconductor chips;
- persistent logistics and transportation challenges in lots of areas, together with america, Europe and China.
Moreover, commodity inflation for the third quarter tends to extend by round $ 60 million to $ 70 million from what PPG beforehand reported.
“The disruptions within the provide of coating merchandise have worsened additional because the
July 19, as a result of a number of extra power majeure declarations and decrease materials allowances from some suppliers, ”he mentioned.
“The corporate additionally continues to evaluate the complete impression of Hurricane Ida, which might embrace extra provide chain results, ”he added.
Primarily based on the uncertainty created by the persevering with and evolving disruptions, PPG has determined to withdraw the beforehand launched monetary steerage for the third quarter and full yr 2021.
Nonetheless, general international financial demand stays “sturdy”, and inventories in lots of PPG end-use channels are at very low ranges, he mentioned.
“When provide situations normalize, the corporate continues to anticipate sturdy gross sales development by means of 2022,” he mentioned.
In the meantime, PPG “continues to make measurable progress” in implementing promoting worth will increase to assist offset excessive uncooked materials prices, and is looking for additional will increase, he mentioned.
Total worth will increase for the third quarter are estimated at round 5%.
Cowl photograph: Freighters unloading containers within the seaport of Fremantle, Australia; archive picture
Supply: Chameleons Eye / Shutterstock