Facing the worst of possible worlds-weak demand and high feedstock costs-raw materials suppliers say the price increases through which the industry has suffered are necessary to maintain profitability. Still stinging from recent price adjustments, job and captive shops are challenged to pass along increases to customers, several of whom are instead seeking reductions. Throw in the fact that higher raw materials pricing further limits a metal finisher's ability to compete against competitive shops operating in China-where labor and materials costs are considerably lower-and you have a prescription for disaster. Since last fall, prices of major raw materials have posted double-digit increases across the board. Suppliers point to an unstable global economy, volatile feedstock pricing, a competitive marketplace, and unsatisfactory margins as the primary drivers of increasing prices. Producers say they have trimmed production and inventory levels in response to the demand slowdown, and are confident that sales will rebound when inventories are worked through.
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