Document peQYbQ6vaJ5EGnbe6kKvOx4O7

Buyers keep scrambling for equipment Long delivery times, soaring prices and shortages abound Shortages, lengthy delivery times and *yiwkcti&g prices are plaguing equip ment buyers. But if bargains have become few and far between, buyers seem to tove learned to live with their many problems. Date French, equipment engineer at Borden rWl"*TMi (Seattle), sums up the by saying it "could be worse," 1---it times, which now are six to nine naihi tor many items, could stretch even farther if there are strikes later this year. This situation certainly puts everyone to die test We're scrounging for anything at any price when a particular production achedtile is at stake. It takes a lot more work on our part to nail down an order than it toed to," French says. Any item that involves castings takes a long ** to obtain. And French indicates toat prices of most items arc up consider ably. For example, stainless steel equip ment, such as fabricated pipe, tanks and psuaaure vessels, cost 40% more than in January and have doubled in price in the laat four years. Others in the Seattle ares concur. A Hooker Chemical plant manager reports Has chlorine pumps take at least six months to deliver and the price is 13% higher than in January. And an equip ment buyer for Crown Zellcrbach says, -"Most piping items are harder to find now because of the great demand created by the Alaska pipeline construction." He figures prices have increased 1-1.3%/month since the first of the year, pre dicts this will continue through the rest of 1*74. But French says it still pays to shop around. In fact, it may be more important than ever. French has found that bids vary an average of 35% now, compared with only 10% last winter. "We actually have had bids on 2-in. stainless steel pipe on which there was a 100% difference in price," he says. SUpplf Badly: The situation is not much different in other parts of the coun try. In Chicago, Emile F. Harp, director of engineering for Armak, observes. Stretch-outs continue in CPI equipment delivery schedules Wetting time new (weeks) Weiting time in April (weekil Boilers, packaged Boilers, field-erected Condensers Heat exchangers, steal Heat exchangers, alloy Heat exchangers, air-cooled Heat exchangers, finned-tuba Heavy-wall exchangers and reactors Reactors and columns, steel Reactors and columns, alloy Tanks, field-erected Agitators Compressors, centrifugal Compressors, reciprocating Compressors, refrigeration Cooling towers Pumps, centrifugal Pumpa, reciprocating Pumps, rotary Steam turbines Electric motors to 260 hp. Electric motors over 260 hp. Pipe, plastic, 3 in. and over Pipe, steel, coated and wrapped Pipe, bare steel Pipe, alloy Condenser tubing, steel Condenser tubing, copper Condenser tubing, stainless Flanges and fittings, steel Flanges, fittings, stainless Valves, steel Valves, alloy Reinforcing bars Insulation, calcium silicate Insulation, refractory Structural steel 32-96 72-120 4090 22-66 4040 1642 28-40 60-156 24-104 30-72 60-156 20-36 62-104 2642 2642 2042 3040 3242 24-32 60-104 Stock-38 2042 642 2547 2-26 1848 2040 24-36 22-34 2848 16-20 8-70 848 12-18 10-26 12-14 46-62 4440 7246 4044 3640 4042 3644 3640 86 60 -- 60104 2024 6240 4042 4048 4242 3046 3242 2026 -- 20-38 3240 1020 3042 -- 3242 2040 - -- 28-34 -- -- W- 52 26-30 -- 62 "Almost everything has slipped badly" Harp, who is in charge of equipment for new installations, says that one 6,000gal. reactor of special construction was ordered in August 1973 with a promised delivery of 23 weeks. It hasn't arrived yet. It is now scheduled for September deliv ery, but Harp isn't confident of that date either. A filter of spetimi design was or dered July 23, 1973, promised for deliv ery in December. It arrived this June. Several glass-fiber-reinforced tanks were ordered in August 1973; one was deliv ered in June, but the others have yet to arrive. As for prices, Harp adds that "guaran tees mean very little." Some manufac turers add a surcharge to prices although the products were sold on a firm-price basis, he explains. "1 doubt this situation will be aotved in six months or even next year. It's going to take a number of yean to correct itself," be says. At Midland, Mich* Dow Chemical purchasing agent Jim Miller says, "What took six months to gat before, now takes one year or 18 months." For the future, Miller expects "the same thing or maybe even worse. There's no letup. There will be continued shortages." Costs have gone up 3 to 10% each month. "We have some specialty fabri cated (not catalogue) items that have August 7. 1974 CHEMICAL WEEK IS ucc 036^20 HIGH PURITY 4, 4* THtODIPHENOL (TDP) 4,4* SULTONYLOIPHENOL (SOP) 99+ Inomnr purity for nginnnring pintles, antioxidant, flame retardant and other intermediate uses. Write or call R. H. Gaps for price and delivery information. CiownZellerbach Chnmfcd Products DMdon Camas 500, Washington SSS07 fHM) SS4-4444 Circle Olt on Mgt Info. Service Card CMCAGOLAND INDUSTRIAL SITES 'l Circle 019 on Mgt Info. Service Card U CHEMICAL WEEK August 7, 1974 gone op 60%," Miller says. His outlook for the next ax months is that costs will go up another 5%. The biggest price surge came when price controls were lifted,** he adds. What is Miller doing to solve equip ment problems?: "Saying a lot of prayers. We order a lot earlier, too. We warn engi neers of long delivery times and costs sad ask them to order six months earlier. Right now we're ordering far January 1975." "Now just a quotation cm equipment fakes three months," says Roland E. Neal, Cow Coming's (Midland, Mich.) purchasing agent Tt took only three weeks to get a bid a year ago." Neal sees no improvement in the future for deliv ery time. "Anything with steel, such as storage and pressure veemls, fakes longer. "Since 1973, chemical process equip ment hat gone up 35%. Steel keep* jump ing in price and with the demand strong, I think the price will continue to go up. Ferroalloys are up drastically--that's a most critical item for us. In 1973 the price was 244/lb. and now it's 35.S*/lb. "We*vt always had a plan, a target date, but now we try to expedite it We rely more on (he supplier, We talk to him more often and try to help him find solu tions for some of his delays. We also tty to stay with suppliers we have confidence Says Thomas Brown, plant manager of Grow Chemical Corpus Pontiac, Mich, coating operation: "Our annual forecast on equipment needs is our only help. We take a look at what we need before the fiscal year starts. If something bums up that we didn't plan for we're out of luck. No Difference: Equipment buying ex periences in the East follow the pattern. A Sun Oil purchasing agent expects lead times on cast steel gate valves to continue to stretch out beyond the current 12 to 14 weeks because many casting bourns are going out of business. Allied Chemical's buyer in Phila delphia says valves that were on eight-to10-week lead time at the beginning of the year are now at 16 weeks. Another equipment purchaser repons be took s price survey in May of items that his company had inquired about last October but had not moved to buy. He found prices meanwhile bad increased 15% to 150%. Some pumps increased 10%, others 30% and others 80% in price, depending on the manufacturer. Biggest price increases were on specialized equip ment. He fays escalator dauses on equipment contracts Maned slowly, but "we went UCr" 036421 through that period like a freight train. Now it's all `price at time of shipment.' Yon jtut don't see front-price contracts ow. Such a contract is one in 300." He sees no sign of improvement in lead **l don't trust anybody-even if I've worked with them for yean. The people who get the stuff arc one* who holler and push to get it If my order is off by 10 weeks I see that it causes chaos," he says. A Littie Light: But there are some signs of optimism. Du Pont says its chemical equipment buyer* don't see much differ* earn between delivery times now and those of six months ago. And while it says that equipment prices have doubled since 1973, it expects considerable easing in the rate of price increases in 1975. A Scott Paper equipment buyer says pi of equipment have increased 25% over the pest six months, but he doesn't mink the same degree of increase will matinue. Reason: the tight money mar* ket, along with high interest rates, will some companies to re-evaluate plant expansions. That, in turn, will take some of the pressure off the capital eqmpmeni market Says Stanley E Carrier, director of purchasing for Arthur G. McKee (Cleve land): "1 don't think things will get tighter. Equipment shops ere booked up through, or nearly through, 1975. There will be more moving around to find a manufacturer who isn't tied up. Deliv eries will be the same, but people will be changing sources. Trices have increased but it is very difficult to measure the amount The best published figures seem to be around one d a half or two percent increase in price per month. That's the general rule, but then you find people who raise their prices 30% all at once. "Standard centrifugal pumps and cen trifugal compressors fall broadly into this category (about 2% increase per month). "Heat exchangers use so much steel plate and steel pipe (steel went up 20% last month) that this greatly influences the price. Some manufacturers bought the steel before the increase, so their prices are lower. "Valves and pipe fittings went up 60% in the first six months. There wasn't too much profit before, so they decided to ML* op," To help ease the supply crunch. Carrier ays, "We are doing more in-shop expe diting. We are trying to get standard ization of specifications, and we are or dering early. Prices? We have to pay them. Wc are arguing like hell and losing every buttle." chemicaj specialties Ferro's new inorganic colors meet requirements for lead-free applications. Ferro's inorganic pigments are chemically acceptable for use where heavy-metal-free pigments ere required for use in paints, meat and poultry packaging, toys and printing inks. Ferro inorganic colors offer excellent heat stability. They are calcined at more than 1700*F and resist acids, alkalis, and have passed typical coil coatars weathering tests. Within a molding temperature range of 550-600'F, there will be less than a 1% difference in visual range spectral reflectance curves. Specify Ferro inorganic colors; available in yellow, buff, raspberry, blue and black. Other Ferro chemical specialty materials Include: polymer additives, inorganic pigments, paint additives, fungicides. Be/Sr ferrites, specialty glass compositions, antimicrobials, colorants end specialty retrectories. For additional information, contact Dept. SCB, One Erieview Plaza, Cleveland, Ohio 44114. (Oj` FERRO Vi/ CORPORATION Circle 020 on Mgt Info. Service Card August 7, 1974 CHEMICAL WEEK 27