Oil's Surge Ignites Cost Increases For Products From Plastics to Shoes
The recent rise in oil prices is reverberating far beyond the world's energy-intensive industries, spurring cost increases for everything from military tents in Iraq and weed killer in Iowa to shoes and Barbie dolls in China.
The continuing surge is causing companies which a year ago saw higher oil prices as a passing phenomenon to rethink their strategies. Many are moving more aggressively to cut costs and raise prices to offset raw material and energy costs that now appear likely to stay high for the foreseeable future.
While rising oil prices are contributing to slower growth and higher inflation, they haven't yet threatened to derail the global economy, which remains robust and able to absorb the jolt, economists say. Some companies are absorbing higher fuel costs themselves, while others are passing on only a portion of the cost to customers.
Still, Germany, Italy and Japan, all of which had slower growth than the U.S. before oil prices started rising in late 2003, have seen their economies contract partly because of higher oil costs. Many developing countries also are struggling with higher oil bills.
CRUDE FACTS
Track the ups and downs of oil prices since 1970.
In the U.S., the Federal Reserve yesterday said the rise in energy prices "has not notably fed through to core consumer prices" as it raised the federal funds rate a quarter point to 2.75% for the seventh time since June. The rate is charged on overnight loans between banks. But the Fed did warn of growing pressures on inflation. And the Labor Department said higher energy and food prices fueled a 0.4% jump in producer prices last month.
The price of oil futures, meanwhile, closed down $1.43, or 2.5%, at $56.03 a barrel on the New York Mercantile Exchange, off the all-time peak of $57.60 hit last Thursday. In inflation-adjusted terms, oil prices remain well below where they were in the 1970s and 1980s.
Around the globe, rising oil prices are percolating in myriad ways. Airlines are suffering, for instance, but the direct impact on cargo carriers is more severe, because they often fly bigger, four-engine planes, travel longer routes and stay in the air more hours. Still, intense competition among passenger carriers has forced airlines to absorb more of the cost of increased fuel, while carriers have passed costs on to customers.
Meanwhile, the prices of materials derived from oil, including plastic and synthetic rubber, also are going up, affecting computers, packaging and car tires. Even military tents have been hit. Seaman Corp., which buys petroleum-based coatings for industrial fabrics used among other things for tents the U.S. military sends to Iraq, saw a double-digit price jump in oil-derived raw materials just before Christmas. It recently was told to expect another wave of increases within 90 days. The closely held Wooster, Ohio, company has passed part of the increase on to its customers, but also has seen its profit margins squeezed.
In the U.S. farm sector, some economists expect profit to drop about 20% this year from last year's record high of $74 billion, in part because soaring energy costs are raising prices on everything from fuel and fertilizer to weed killer.
In Iowa, corn farmers are paying 20% more to fertilize their fields this spring with anhydrous ammonia, a nitrogen-rich chemical made from natural gas. Prices for natural gas, used broadly in manufacturing, chemicals and power generation, have tracked oil's rise and are near their historic highs. Meanwhile, makers of many pesticides, which use petroleum-derived compounds, are trying to pass along higher costs with retail price boosts this spring of 3% to 5%.
The long-term effect of such changes is unclear. Ken Rogoff , a Harvard University economics professor and former chief economist for the International Monetary Fund, says a key difference between today and the oil crisis of the 1970s is the transformation of "inflation expectations." Three decades ago, higher oil prices quickly spiraled into wage and price inflation. Since then, central banks around the world have proven able to move quickly to stem inflationary pressures by tightening monetary policy.
"As long as everyone believes the world central banks will raise rates fast enough to anchor inflation expectations, oil won't matter," says Mr. Rogoff.
Still, some economists warn that if oil rises to a higher level and stays there, as some analysts predict, consumers could stop spending, curtailing economic growth. The scenario is that spending cuts would eat into employment, further damping consumer sentiment.
Moreover, companies face other sources of inflationary pressure besides oil and natural gas. Commodities of all types, particularly key metals such as copper, have soared recently, while a weaker U.S. dollar has exposed the U.S., China and other dollar-linked economies to import-price inflation.
Though consumers so far are absorbing higher gasoline prices at the pump, they are being hit in other ways. At a recent conference, Mattel Inc. Chairman and Chief Executive Robert Eckert told analysts and investors the toy maker was forced to take "a very modest price increase" of 2% to 4% in January on its products, including Barbie dolls, to partially offset what he sees as a long-term higher cost level for key materials and services linked to oil. Those include resin plastic, a petroleum-based product that is a universal component of Barbie and other toys, as well as transportation. Barbie dolls are made in China and Indonesia and distributed world-wide.
Rising oil also is boosting the cost of raw materials for diapers, pantiliners, Swiffer dusters and other consumer products made with petroleum-based fabrics. Polymer Group Inc., a producer of fabrics made from petroleum-based products, said on Friday that rising costs of polypropylene and other key petroleum-based raw materials have forced it to raise prices globally, including on all products sold in the U.S.
The North Charleston, S.C., company said the price of polypropylene climbed more than 50% in 2004 and has risen an additional 10% to 15% since December. Polyester prices also have risen 15% since January, the company said. Dennis Norman, a Polymer Group spokesman, declined to specify how large price increases will be and said they will vary by global region. The company operates 21 manufacturing facilities in 10 countries.
Polymer Group says its largest customer is Procter & Gamble Co. P&G declined to comment on whether the company would raise prices on its products using PGI material.
Similar effects are being felt outside the U.S. Europe was somewhat buffered from rising oil prices last year by the weakness of the dollar against the euro. That made oil imports less costly than they would have been otherwise. But a relatively stable exchange rate this year has meant Europe has felt the renewed rise of oil prices fully.
High oil prices were one factor that recently led Germany's BMW AG to warn its 2005 profit might not be quite as high as last year's record mark. The Munich-based luxury-car maker says it expects its 2005 results to be "approximately" at last year's level, suggesting they might be lower, even though the company foresees record sales volumes this year.
In China, costlier oil has rippled through the fast-growing manufacturing sector in the form of higher costs of plastic and other petroleum-based materials that are used to make everything from toys to pharmaceuticals to house paint. So far, manufacturers have managed to absorb much of these costs without prompting higher prices for consumers. Strong and rising demand around the globe for Chinese products means many companies are enjoying growth in their overall profits even as high oil prices diminish their profit margins.
But there are indications the situation could change if oil prices stay high. Paul Goodman, chairman and CEO of DFP Shoe Co., a maker of women's footwear in southern China, says that during much of last year, fierce competition prevented him from raising his shoe prices even as the cost of polyurethane and other inputs rose sharply with the price of oil.
In recent months, he said, he and his competitors have increased the amount they charge their buyers by about 5%. The increase is still smaller than the rise in production costs. "You can't just whack buyers over the head" with a big jump in price, he said. Still, he said, he anticipates shoe prices will continue to creep up if oil prices don't come down.
High oil prices are costing manufacturers in other ways. Chronic electricity shortages throughout China have led many factories to purchase generators that run on diesel fuel. China's electric grid becomes especially strained in the summer, when air conditioners are running across the country, and higher oil prices will mean higher diesel costs as the weather heats up.
Companies world-wide also are stepping up efforts to curb energy use in the face of higher prices. Kerry's Bromeliad Nursery Inc. in Homestead, Fla., one of the U.S.'s largest commercial orchid growers, has been hammered by the rising price of natural gas to heat its greenhouses as well as surcharges on shipping plants to big box retailers like Home Depot. The company recently put insulated shades in its greenhouses that can be closed at night to cut the heat loss, shaving more than 20% off its heating bills.
"When you're standing next to a three-inch gas main hissing loudly," said President Kerry Herndon, "you're listening to the sound of money burning."
油价飙升推动各类产品成本上涨
近期油价上涨产生的影响远远波及到全球能源密集型行业之外，从伊拉克的军用帐篷，到艾奥瓦州的除草剂，乃至中国的鞋子和芭比娃娃，几乎所有产品的价格都因此而上涨了。
油价的持续上涨令一年前还认为高油价只是暂时现象的公司不得不重新考虑经营战略。许多企业开始更加积极地削减成本，提高价格以抵消在可预见的未来仍将维持高位的原材料和能源成本。
尽管油价上涨会降低经济增长率，提高通货膨胀率，但经济学家表示，这尚未危及全球经济，目前的经济运行依然强劲，能够承受这种冲击。部分公司在自行消化燃料成本上涨的压力，而其它公司则将部分成本转嫁给了客户。
但德国、意大利和日本的经济都有所放缓，部分原因就在于石油成本的增加。这些国家在2003年底油价开始上涨前的增长率就低于美国。许多发展中国家也饱受油价上涨之苦。
在美国，美国联邦储备委员会(Federal Reserve, 简称Fed)周二表示，能源价格的上涨并未明显体现到核心消费者价格指数中，Fed决定将联邦基金利率上调25个基点，至2.75%，这已经是去年6月份以来的第七次加息。但Fed的确对通货膨胀压力不断加大提出了警告。美国劳工部(Labor Department)表示，能源和食品价格的上涨使上月的生产者价格指数增加了0.4%。
与此同时，纽约商交所原油期货下跌1.43美元，报每桶56.03美元，跌幅2.5%，脱离了上周四创出的57.60美元的历史高点。经通货膨胀调整后，油价仍大大低于上世纪70至80年代。
油价上涨的影响在全球各地无处不在。比如，航空公司就面临压力，对货运航空公司的直接影响尤为严重，因为这些公司使用的多是更大的4引擎飞机，航行线路更长，飞行时间也更多。同样，客运航空公司间的激烈竞争也迫使它们需要吸纳更多燃料上涨的成本，尽管已经向客户转移了部分成本。
与此同时，从石油中提炼出来的材料，如塑料和合成橡胶的价格也在走高，影响到了电脑、包装和汽车轮胎行业。甚至军用帐篷也受到了冲击。Seaman Corp.就发现，圣诞节前从石油中提炼的原材料的价格上涨幅度达到了两位数，该公司为伊拉克美军生产的帐篷需要使用从石油中提取的涂料。该公司最近接到通知说，预计在90天内价格还要再次上涨。这家少数人持股公司已经将部分成本的增加转嫁给了客户，但利润率还是下滑了。
在美国农业领域，部分经济学家预计今年的利润将比去年740亿美元的历史高点减少大约20%，原因之一就是能源价格上涨提高了燃料、化肥和除草剂等各种产品的价格。
在艾奥瓦州，种植玉米的农民今年春季发现无水氨肥的价格上涨了20%。无水氨肥是用天然气加工而成的。天然气也在跟随油价上扬，目前接近历史最高水平。与此同时，许多杀虫剂的生产商也在今年春季将零售价提高了3%-5%，以此转移部分成本的上涨。
油价上涨的长期影响尚不明朗。哈佛大学(Harvard University)经济学教授、前国际货币基金组织(International Monetary Fund)首席经济学家肯?罗格夫(Ken Rogoff)说，当前和70年代石油危机时的主要不同在于通货膨胀预期的转变。30年前，油价上涨迅速导致了工资和价格的通货膨胀。此后，全球央行迅速采取了紧缩货币政策，以遏制通货膨胀压力。
罗格夫称，只要所有人都相信全球各国央行将迅速提高利率，降低对通货膨胀的预期，油价就无碍大局。
但部分经济学家警告说，如果油价像某些分析师预计的那样，上涨到更高的水平，并维持在高位，消费者就可能停止支出，从而拖累经济增长。这时，降低支出就可能减少就业，进一步打击消费者信心。
而且，公司还面临石油和天然气之外的其他通货膨胀压力。各种金属商品，尤其是铜等主要金属的价格近期均大幅上涨，而美元走软令美国、中国和其他汇率与美元挂钩的经济体的进口价格升高。
尽管消费者目前还能够容忍飞涨的汽油价格，但他们正受到其它形式的打击。美泰公司（Mattel Inc.）的董事长兼首席执行长罗伯特?埃克特(Robert Eckert)在最近的一次会议上向分析师及投资者表示，这家玩具制造商被迫在1月份将其芭比娃娃等产品的价格上调了2%-4%，以部分抵消同石油相关的主要材料及服务成本长期居高不下的影响。这包括芭比娃娃和其他玩具广泛采用的树脂塑料价格和运输成本的上升。芭比娃娃在中国和印度尼西亚制造，在全球分销。
油价上涨还推高了尿布、卫生护垫、掸尘刷和其它消费类化纤产品的原材料的成本。化纤生产商Polymer Group Inc.上周五称, 聚丙烯及其它主要化工原材料价格的上涨已迫使公司在全球范围内提高价格，其中包括在美国销售的所有产品。
这家位于南卡罗来纳州的公司表示，聚丙烯的价格在2004年上涨了50%以上，自去年12月份以来又上涨了10%-15%。该公司称，1月份以来，聚酯价格也上涨了15%。Polymer Group的发言人丹尼斯?诺曼(Dennis Norman)拒绝透露价格还将上涨多少，只是称在全球不同地区的涨幅不同。该公司在10个国家开有21家生产厂。
Polymer Group称，该公司最大的客户是宝洁公司(Procter & Gamble Co., 又名:宝硷公司)。宝洁公司拒绝就其是否提高了采用PGI材料的产品价格发表评论。
美国以外的地区也未能幸免。由于美元兑欧元走软，欧洲去年受油价上涨的影响不大，这使他们的石油进口价格低于美元兑欧元保持坚挺时的情况。但今年相对稳定的汇率意味著欧洲已经全面感受到油价再度上涨的压力。
油价上涨是德国宝马汽车(BMW AG)近期发布预警，称2005年利润将低于上年创纪录水平的原因之一。这家豪华汽车生产商称，预计2005年业绩将大体位于上年水平，暗示可能低于2004年，尽管该公司预计今年的销售量将达到历史最高水平。
在中国，石油价格上涨则通过用途广泛的塑料和其他石油相关材料的成本上升扩散到快速发展的制造业中。迄今为止，制造商消化了大部分成本上涨带来的压力，而没有通过提价转移给消费者。全球对中国产品的强劲不衰的需求意味著尽管油价上涨降低了许多公司的利润率，但他们的总利润依然增长。
但有迹象显示，如果油价继续维持高位，情况可能发生变化。位于中国南部的女鞋生产厂DFP Shoe Co.的董事长兼首席执行长保罗?古德曼(Paul Goodman)说，在去年大部分时间里，由于竞争激烈，即使在聚亚安酯及其它原材料随油价大幅上涨时，他都没有提高鞋价。
他说，近几个月来，他和竞争对手都把鞋价提高了约5%。这一增幅仍低于生产成本的涨幅。他说，如果油价不回落，他预计鞋价仍将继续上涨。
高油价也使制造商在其他方面付出了代价。中国各地长期的电力短缺令许多工厂购买了柴油发电机。在夏季的空调使用高峰期，中国的电网尤其紧张，油价上涨也意味著柴油成本的上升。
由于价格的上涨，全球各地的企业也在努力降低能源的使用量。美国最大的商业兰花种植商Kerry's Bromeliad Nursery Inc.因给温室取暖用的天然气价格的上涨，以及向Home Depot等大零售商运送花草缴纳的附加费而苦不堪言。该公司最近在温室中安装了保温板，能够在夜晚关闭，以降低热量损失，此举能够使供暖费下降20%。
总裁克里?赫恩登(Kerry Herndon)说，站在嘶嘶做响的3英寸供气管道旁边时，听到的简直就是烧钱的声音。
油价飙升推动各类产品成本上涨
近期油价上涨产生的影响远远波及到全球能源密集型行业之外，从伊拉克的军用帐篷，到艾奥瓦州的除草剂，乃至中国的鞋子和芭比娃娃，几乎所有产品的价格都因此而上涨了。
油价的持续上涨令一年前还认为高油价只是暂时现象的公司不得不重新考虑经营战略。许多企业开始更加积极地削减成本，提高价格以抵消在可预见的未来仍将维持高位的原材料和能源成本。
尽管油价上涨会降低经济增长率，提高通货膨胀率，但经济学家表示，这尚未危及全球经济，目前的经济运行依然强劲，能够承受这种冲击。部分公司在自行消化燃料成本上涨的压力，而其它公司则将部分成本转嫁给了客户。
但德国、意大利和日本的经济都有所放缓，部分原因就在于石油成本的增加。这些国家在2003年底油价开始上涨前的增长率就低于美国。许多发展中国家也饱受油价上涨之苦。
在美国，美国联邦储备委员会(Federal Reserve, 简称Fed)周二表示，能源价格的上涨并未明显体现到核心消费者价格指数中，Fed决定将联邦基金利率上调25个基点，至2.75%，这已经是去年6月份以来的第七次加息。但Fed的确对通货膨胀压力不断加大提出了警告。美国劳工部(Labor Department)表示，能源和食品价格的上涨使上月的生产者价格指数增加了0.4%。
与此同时，纽约商交所原油期货下跌1.43美元，报每桶56.03美元，跌幅2.5%，脱离了上周四创出的57.60美元的历史高点。经通货膨胀调整后，油价仍大大低于上世纪70至80年代。
油价上涨的影响在全球各地无处不在。比如，航空公司就面临压力，对货运航空公司的直接影响尤为严重，因为这些公司使用的多是更大的4引擎飞机，航行线路更长，飞行时间也更多。同样，客运航空公司间的激烈竞争也迫使它们需要吸纳更多燃料上涨的成本，尽管已经向客户转移了部分成本。
与此同时，从石油中提炼出来的材料，如塑料和合成橡胶的价格也在走高，影响到了电脑、包装和汽车轮胎行业。甚至军用帐篷也受到了冲击。Seaman Corp.就发现，圣诞节前从石油中提炼的原材料的价格上涨幅度达到了两位数，该公司为伊拉克美军生产的帐篷需要使用从石油中提取的涂料。该公司最近接到通知说，预计在90天内价格还要再次上涨。这家少数人持股公司已经将部分成本的增加转嫁给了客户，但利润率还是下滑了。
在美国农业领域，部分经济学家预计今年的利润将比去年740亿美元的历史高点减少大约20%，原因之一就是能源价格上涨提高了燃料、化肥和除草剂等各种产品的价格。
在艾奥瓦州，种植玉米的农民今年春季发现无水氨肥的价格上涨了20%。无水氨肥是用天然气加工而成的。天然气也在跟随油价上扬，目前接近历史最高水平。与此同时，许多杀虫剂的生产商也在今年春季将零售价提高了3%-5%，以此转移部分成本的上涨。
油价上涨的长期影响尚不明朗。哈佛大学(Harvard University)经济学教授、前国际货币基金组织(International Monetary Fund)首席经济学家肯?罗格夫(Ken Rogoff)说，当前和70年代石油危机时的主要不同在于通货膨胀预期的转变。30年前，油价上涨迅速导致了工资和价格的通货膨胀。此后，全球央行迅速采取了紧缩货币政策，以遏制通货膨胀压力。
罗格夫称，只要所有人都相信全球各国央行将迅速提高利率，降低对通货膨胀的预期，油价就无碍大局。
但部分经济学家警告说，如果油价像某些分析师预计的那样，上涨到更高的水平，并维持在高位，消费者就可能停止支出，从而拖累经济增长。这时，降低支出就可能减少就业，进一步打击消费者信心。
而且，公司还面临石油和天然气之外的其他通货膨胀压力。各种金属商品，尤其是铜等主要金属的价格近期均大幅上涨，而美元走软令美国、中国和其他汇率与美元挂钩的经济体的进口价格升高。
尽管消费者目前还能够容忍飞涨的汽油价格，但他们正受到其它形式的打击。美泰公司（Mattel Inc.）的董事长兼首席执行长罗伯特?埃克特(Robert Eckert)在最近的一次会议上向分析师及投资者表示，这家玩具制造商被迫在1月份将其芭比娃娃等产品的价格上调了2%-4%，以部分抵消同石油相关的主要材料及服务成本长期居高不下的影响。这包括芭比娃娃和其他玩具广泛采用的树脂塑料价格和运输成本的上升。芭比娃娃在中国和印度尼西亚制造，在全球分销。
油价上涨还推高了尿布、卫生护垫、掸尘刷和其它消费类化纤产品的原材料的成本。化纤生产商Polymer Group Inc.上周五称, 聚丙烯及其它主要化工原材料价格的上涨已迫使公司在全球范围内提高价格，其中包括在美国销售的所有产品。
这家位于南卡罗来纳州的公司表示，聚丙烯的价格在2004年上涨了50%以上，自去年12月份以来又上涨了10%-15%。该公司称，1月份以来，聚酯价格也上涨了15%。Polymer Group的发言人丹尼斯?诺曼(Dennis Norman)拒绝透露价格还将上涨多少，只是称在全球不同地区的涨幅不同。该公司在10个国家开有21家生产厂。
Polymer Group称，该公司最大的客户是宝洁公司(Procter & Gamble Co., 又名:宝硷公司)。宝洁公司拒绝就其是否提高了采用PGI材料的产品价格发表评论。
美国以外的地区也未能幸免。由于美元兑欧元走软，欧洲去年受油价上涨的影响不大，这使他们的石油进口价格低于美元兑欧元保持坚挺时的情况。但今年相对稳定的汇率意味著欧洲已经全面感受到油价再度上涨的压力。
油价上涨是德国宝马汽车(BMW AG)近期发布预警，称2005年利润将低于上年创纪录水平的原因之一。这家豪华汽车生产商称，预计2005年业绩将大体位于上年水平，暗示可能低于2004年，尽管该公司预计今年的销售量将达到历史最高水平。
在中国，石油价格上涨则通过用途广泛的塑料和其他石油相关材料的成本上升扩散到快速发展的制造业中。迄今为止，制造商消化了大部分成本上涨带来的压力，而没有通过提价转移给消费者。全球对中国产品的强劲不衰的需求意味著尽管油价上涨降低了许多公司的利润率，但他们的总利润依然增长。
但有迹象显示，如果油价继续维持高位，情况可能发生变化。位于中国南部的女鞋生产厂DFP Shoe Co.的董事长兼首席执行长保罗?古德曼(Paul Goodman)说，在去年大部分时间里，由于竞争激烈，即使在聚亚安酯及其它原材料随油价大幅上涨时，他都没有提高鞋价。
他说，近几个月来，他和竞争对手都把鞋价提高了约5%。这一增幅仍低于生产成本的涨幅。他说，如果油价不回落，他预计鞋价仍将继续上涨。
高油价也使制造商在其他方面付出了代价。中国各地长期的电力短缺令许多工厂购买了柴油发电机。在夏季的空调使用高峰期，中国的电网尤其紧张，油价上涨也意味著柴油成本的上升。
由于价格的上涨，全球各地的企业也在努力降低能源的使用量。美国最大的商业兰花种植商Kerry's Bromeliad Nursery Inc.因给温室取暖用的天然气价格的上涨，以及向Home Depot等大零售商运送花草缴纳的附加费而苦不堪言。该公司最近在温室中安装了保温板，能够在夜晚关闭，以降低热量损失，此举能够使供暖费下降20%。
总裁克里?赫恩登(Kerry Herndon)说，站在嘶嘶做响的3英寸供气管道旁边时，听到的简直就是烧钱的声音。
