Economy
Paint Increase Surprises Prepaint Market
Written by Tim Triplett
January 16, 2019
Sherwin-Williams has announced a 6 percent hike in the cost of paint effective in March, upsetting customers in the prepainted steel and aluminum market.
“There is no justification for this paint increase,” said one coil coater. “Oil prices are at their lowest level in years.”
Sherwin-Williams raised prices twice last year when oil prices were much higher, but did not lower the cost of the petroleum-based products when oil prices plummeted. “Paint prices have never dropped, which is amazing,” said one executive. Combined with last year’s increases, the cost of paint has gone up by nearly 20 percent, he estimated. “When you look at all the inputs, this price increase makes no sense. In my opinion, the other paint companies will not follow, so the pressure will be on Sherwin-Williams. They will have to decide how committed they are to the increase.”
“I can’t imagine the paint increase being successful. We see market conditions [in prepaint] being really tough right now with prices continuing to fall,” added a service center executive.
The prepaint market is extremely competitive, with excess coil coating capacity domestically and imports still arriving from Mexico and Asia despite the U.S. tariffs. On top of that, demand in construction and other key markets showed signs of slowing in fourth-quarter 2018, making it difficult for prepaint suppliers to pass along the additional cost. “Usually October is a great month for us in the Southeast, but not last October. Demand was not that strong,” the executive noted.
Sherwin-Williams did not respond to SMU’s request for comment.
Tim Triplett
Read more from Tim TriplettLatest in Economy
Architecture billings flat in October after months of contraction
Architecture firms reported stable billings in October, according to the latest Architecture Billings Index (ABI) released by the American Institute of Architects (AIA) and Deltek. This follows 20 months of contracting business conditions.
Trump taps Lutnick to be Commerce Secretary
President-elect Donald Trump has named Wall Street veteran Howard Lutnick as the new US Secretary of Commerce.
New York state manufacturing activity ramps up to multi-year high
New York state’s manufacturing sector saw substantial recovery in November, according to the latest Empire State Manufacturing Survey from the Federal Reserve Bank of New York.
CRU: Dollar and bond yields rise, metal prices fall as Trump wins election
Donald Trump has won the US presidential election. The Republican party has re-taken control of the Senate. Votes are still being counted in many tight congressional races. But based on results so far, the Republicans seem likely to maintain control of the House of Representatives. If confirmed, this will give Trump considerable scope to pass legislation pursuing his agenda. What this means for US policy is not immediately obvious. Trump will not be inaugurated until Jan. 20. In the coming weeks and months, he will begin to assemble his cabinet, which may give a clearer signal on his policy priorities and approaches. Based on statements he made during the presidential campaign, we have set out the likely direction of his economic policy here and green policy here.
ISM: Manufacturing index fell in Oct to lowest point of ’24
Domestic manufacturing contracted for the seventh straight month in October, according to the latest report from the Institute for Supply Management (ISM). This marks the 23rd time in the last 24 months that it has been in contraction.