Abrasives Procurement Category Market Research Report from IBISWorld has Been Updated

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Suppliers faced volatile input costs and fluctuations in demand over the past three years, prompting them to raise prices to hedge against risks. For these reasons and to help procurement professionals make better buying decisions faster, business intelligence firm IBISWorld has updated a report on the procurement of Abrasives in its growing collection of procurement category market research reports.

IBISWorld procurement market research
The number of low-cost imports into the domestic market will stimulate price-based competition with suppliers, thereby slowing the rate at which prices grow in the three years to 2017.

Abrasives have a buyer power score of 2.5 out of 5, which indicates somewhat unfavorable negotiation conditions for buyers. Rising prices, growing input costs and a limited availability of substitutes weaken buyer power. Nevertheless, buyers benefit from low market share concentration, limited product specialization and rising imports. “Abrasives coated with aluminum oxide represent the largest product category in this market, therefore, aluminum is one of the largest input costs for most manufacturers,” says IBISWorld procurement analyst Cameron Roark. “Unfortunately for buyers, volatile aluminum prices have resulted in higher prices for abrasives across the board.” Aluminum's price instability has caused vendors to attach risk premiums to their goods to protect their profit margins. On the other side of the supply chain, improving downstream demand from industrial production and construction markets have also placed upward pressure on prices. Lastly, abrasives have few viable substitutes, which means buyers cannot leverage the availability of other products in negotiations.

However, not all market conditions hurt buyer power. Abrasives are not typically specialized, which means that most vendors in the market offer comparable products, making it easier for buyers to choose an appropriate vendor. The top four vendors in the market are 3M, Saint-Gobain, Sandvik and Washington Mills. “The large number of vendors in the market forces suppliers to compete for market share, which further benefits buyer power,” adds Roark. Buyers can look abroad at foreign vendors as well because an appreciating US dollar makes foreign abrasives cheaper. These factors combined place downward pressure on prices, keeping prices from rising at an even faster rate.

While prices are expected to continue rising over the next three years, albeit at a slower rate, buyers are encouraged to consider supply contracts. Furthermore, the volatility of abrasive prices is high, which means buyers are at risk of significant price fluctuations. Supply contracts lock in prices, curb the risk of price fluctuations and secure supply. For more information, visit IBISWorld’s Abrasives procurement category market research report page.

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IBISWorld Procurement Report Key Topics

This report is intended to assist buyers of abrasives, including papers, pads, cloths, discs, belts and abrasive blasters. Abrasives remove surface material on an object using force, typically through rubbing, grinding, polishing, sanding or blasting. Abrasives generally use a range of minerals to remove surface material. The appropriate mineral for the job is typically determined by gauging the hardness of the minerals using the Mohs scale. This report does not include abrasive cremes, abrasive pastes, compressors, soaps or solvents.

Executive Summary
Pricing Environment
Price Fundamentals
Benchmark Price
Pricing Model
Price Drivers
Recent Price Trend
Price Forecast
Product Characteristics
Product Life Cycle
Total Cost of Ownership
Product Specialization
Substitute Goods
Regulation
Quality Control
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Imports
Competitive Environment
Market Share Concentration
Market Profitability
Switching Costs
Purchasing Process
Buying Basics
Buying Lead Time
Selection Process
Key RFP Elements
Negotiation Questions
Buyer Power Factors
Key Statistics

About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.

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Gavin Smith
IBISWorld Inc.
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