The Other Inventory Correction

There is a lot of talk of plastics converters running down their inventories in the past few months, and that, once those inventories are depleted, the industry must and will bounce back. But, as Dr. Steven Landau of SRI Consulting pointed out to me recently, there is a lot of material currently in inventory in some unusual places in the supply chains.

Domestic appliances in unsold or foreclosed homes are one example, cars sitting unsold on lots throughout the USA, or stuck in ports waiting for dealers to take them, are another. In timing a recovery, it is not only the converters' inventories we should watch, but the rate of draw down through the whole supply chain by the ultimate consumer. From that angle, this is going to take quite a while . . .

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