Fischer Tech

[dydx]

With oil prices that low, I guess soon or later prices of plastic resins - the key raw material for Fischer's plastic components manufacturing business - will fall by a big margin, and this will translate to quite substantial cost savings to Fischer and other plastic components manufacturers

Dydx-san

Although I also have vested interests in this counter and FEEL that it will break 20cts soon , your statement is probably wrong, i.e. AFAIK contract manufacturers do not typically take risks on material costs. In other words, the savings will be passed directly back to the customer....

Well, when plastics (raw material) prices fall, rationally speaking there should be a positive lag effect for the contract manufacturers before part of or all the cost savings are passed on to the OEMs (customers). There are those common commodity-typed plastic components - where their selling prices have been already pressed down to the bones by the OEMs - for which the CMs now would resist any further price-down when prices for their plastic raw materials fall. Also, lower plastics prices may mean less price-down pressure going forward from the OEMs, and may also mean for the CMs bigger orders from the OEMs driven by rising worldwide demand for certain products due to their lower selling prices. Whatever it is, falling plastics prices should be positive to well-established contract manufacturers like Fischer.