PPG says it expects sales volumes in the third quarter of 2021 will be lower by US$225m to US$275m, compared to estimates at the start of Q3.
The company says sales volumes are being impacted by increasing disruptions in commodity supplies; further reductions in customer production due to certain parts shortages such as semi-conductor chips and continuing logistics and transportation challenges in many regions, including the US, Europe and China.
In addition, raw material inflation for the third quarter is trending higher than previously communicated by around US$60m to US$70m.
Coatings commodity supply disruptions have further deteriorated since the company’s earnings announcement on 19 July, due to several additional force majeure declarations and lower material allocations from certain suppliers. The company also continues to assess the full impact of Hurricane Ida, which could include additional supply chain effects.
The company reported aggregate global economic demand remains robust and inventories in many of the supplier’s end-use channels are at very low levels. When supply conditions normalise, the company continues to expect strong sales growth into 2022.
PPG noted it continues to make progress implementing selling price increases to help offset elevated raw material costs and is seeking further increases. Overall price increases for the third quarter are estimated to be around 5% with similar contributions from both operating segments.
Based on the uncertainty created by these continuing and evolving disruptions, the company has elected to withdraw previously communicated financial guidance for the third quarter and full-year 2021.