Hurricanes whip up prices; forecast calls for stormy skies

Tom Stundza -- Purchasing, 11/3/2005

What has been described as a "flood of price increases" has engulfed the chemical and resins marketplace. Basically, producers are facing persistently high and volatile energy and raw material costs, including crude oil but especially natural gas, which are impacting significantly the cost of production, says Pat Dawson, Dow Chemicals' vice president for polyurethanes and thermoset systems in Midland, Mich.

Yet, demand is coming back on line faster than production is, and it is robust enough to weather prices that have doubled in the past two months, says Frank Mitsch, a chemical industry analyst at Fulcrum Global Partners in New York. Upshot: Buyers will see no immediate let up in the inflationary spiral triggered by hurricanes Katrina and Rita.

In an explanation of what is impacting Dow Chemical and other producers, Dawson says, "this already challenging environment has been further exacerbated by the recent hurricanes, which have caused significant logistical issues resulting from damage to the transportation infrastructure, as well as impacted raw material and natural gas availability. The full impact of these events is still unfolding and their collateral effect continues to be assessed." Since August, for example, prices for ethylene—a major chemical and resins feedstock—have risen 42% to 58¢/lb by mid-October, up 13¢ since the end of September alone.

Dow Chemical increased prices in the U.S. and Canada for the following polyurethane products: toluene diisocyanate (TDI) by 25¢/lb; polyether and copolymer polyols by 10¢ and methylene diphenyl diisocyanate (MDI) by 7¢. In a lengthy follow-up statement, Dawson adds that "given the high cost of gasoline, the prices of key precursor materials, such as propylene and toluene, are dramatically rising as their alternative value as a fuel additive increases."

Dawson continues that high global demand and tight supply conditions remain for MDI and polyols, adding that TDI supply/demand fundamentals are expected to change due to the industry consolidation underway.

Meanwhile, competitor Huntsman Polyurethanes raised prices in all North American and South American market segments in November for its MDI isocyanates by 8¢/lb, polyols by 10¢ and systems by 9¢.

BASF has increased North American prices by 12¢/lb for Styrolux-brand and Styroclear-brand styrene butadiene copolymers used in injection molding and extrusion thermoplastic applications. Styrolux is used for medical applications and food service products while Styroclear makes garment hangers. BASF also raised prices in the U.S. and Canada on all carboxylated styrene-butadiene latex products supplied to the adhesives, architectural coatings, carpet, construction and nonwovens industries by 6¢ per dry pound. The products are sold under the Butofan, Styrofan and Styronal brands.

BASF also raised North American prices on all acrylic and styrene-acrylic latex products sold under the Acronal and Acronal Optive brands supplied to the adhesives, architectural coatings, construction and nonwovens industries by 6¢/lb (dry).

Dow Latex is increasing the prices of all styrene butadiene latex products sold into the carpet industry by 6¢/lb (dry) and all acrylic latex products sold into the carpet industry by 10¢/lb in the U.S. and Canada. The epoxy products and intermediates business of Dow Chemical are raising prices on a select number of its epoxy intermediate products in North America—allyl chloride by 9¢/lb, epichlorohydrin by 7¢/lb and glycerin by 10¢/lb.

Honeywell boosted Aclar-brand film in November by 5% for both the homopolymer and copolymer products used primarily in pharmaceutical applications.

Eastman Chemical increased the price in October by 5¢/lb on isophthalic acid sold in North America and Latin America. Dow Emulsion Polymers is increasing the prices by 5¢/lb (dry) of styrene/butadiene latex and styrene/ acrylate latex products sold into the paper industry in the U.S. and Canada. Additionally, Dow Chemical is increasing the prices of styrene-based solid plastic pigments and hollow plastic pigments sold into the paper industry by 8¢/lb (dry).

Lyondell Chemical and Kerr-McGee Chemical increased prices for all rutile and anatase titanium dioxide pigments by 6¢/lb in the U.S. and Mexico and by 7¢ in Canada. Specialty chemicals maker Chemtura raised the price of its flame retardant grade of antimony oxide to $2/lb due to a recent increase of 55¢ in the average published price of antimony metal. Chemtura also raised brominated flame retardants by 65¢ to $1.40 per kilogram, depending on the product line.

Arkema Technical Polymers boosted prices by 4% for high-performance poly-amides in October due to "record increases in energy, transportation and raw material costs," says Jim McAliney, the firm's global general manager for polyamides.

Specialty chemical company Solutia has increased prices on its nylon industrial and airbag grade fiber and air jet textured products by10% and on adipic acid products by 5¢/lb. Solutia has implemented up to a 10% price increase on all industrial and airbag grade fiber, as well as air jet textured products. Solutia also boosted prices by 10% in North America for Ascend-brand nylon polymers and Vydyne-brand molding resins.

DuPont Engineering Polymers boosted nylon products by 12¢/lb for Zytel-brand and Minlon-brand PA66 products, and by 15¢/lb for Zyten HTN-brand products.

Dow Chemical's specialty chemicals portfolio of polyglycols and surfactants—Tergitol, Triton and Carbowax–are rising by 12¢/lb to 13¢/lb, although a 5¢ temporary voluntary allowance (TVA) would reduce prices in November. Pilot Chemical boosted alkyl benzene sulfonic acids by 8¢/lb and a whole series of surfactants by 1¢ to 5¢, depending on the product. Eka Chemicals increased various paper chemical prices by 5-20%. DuPont's Coatings & Color Technologies unit has increased OEM Products by 12-25%, and Advanced Coding Systems by 4-11%.

Basell has implemented a price increase of 12¢/lb for all polypropylene products in North America. Polymer Group boosted polyester, polypropylene and polyethylene products by up to 12% in October and by up top 15% for certain oriented polyolefin products.

DSM Engineering Plastics increased prices across several product families in North America by 15¢/lb for all Akulon-brand and Nylatron-brand nylon products, Stanyl-brand polyamide 46 compound products, Arnitel-brand copolyester elastomer products, Arnite-brand polyester products and Xantar-brand polycarbonate products—plus18¢/lb for Stany-brand polyamide 46 unfilled products.

Ferro's polymer additives division has raised benzyl phthalate and phosphate ester plasticizers by 5¢/lb. FMC has increased prices for soda ash by $15 per short ton while FMC Lithium is increasing global prices for butyllithium and other specialty organic products by 6% to 12%. Gaylord boosted pricing for dimethyl sulfide by 6¢/lb and dimethyl sulfoxide by up to 15¢/lb. Hercules' Aqualon business has increased the price for all grades of pentaerythritol by 12¢/lb in North America. Norac increased North American pricing on all grades of Coad metallic stearates by 6¢/lb and Mathe metallic stearates by 15¢/lb.

INDSPEC Chemical, a unit of Occidental Chemical, raised prices by 50¢/kilogram for Resorcinol and its derivatives. Thiele Kaolin boosted price tags for kaolin products by up to 20%, depending on the grade. Ticona Chemical increased the price of its Celcon and Hostaform acetal copolymer, Celanex polybutylene terephthalate, Impet polyethylene terephthalate, Vandar thermoplastic polyester blends, Riteflex thermoplastic elastomer, and Celstran long fiber—all by 12¢/lb. Velsicol Chemical raised benzyl alcohol by 15¢/lb, and increased all Benzoflex plasticizers and Velate coalescents by 15%.

Durez is raising prices of phenolic resins by 2¢/lb to 8.5¢, depending on the type—liquid, flake, lump, powder or methylon. International Specialty Products has boosted elastomer prices by 3.5¢/lb to 4.5¢/lb, depending on the grade of styrene butadiene rubber. Rhodia has raised by 10% across the board its range of polyamide 6 and polyamide 6.6 compounded products.

Special chemical house Albemarle increased prices of bulk 14.2-grade calcium bromide brine under the Wellbrom-brand to $1,435 per metric ton and bulk 19.2-grade zinc bromide brine to $2,160 per metric ton.

Air Products is implementing a price increase of 15¢/lb in the U.S. and Canada for all Airthane-brand and Versathane-brand polyurethane prepolymers. Air Products Polymers is planning a 6¢/b (wet) increase for acrylic-based polymers marketed by the company under the Flexcryl, Airflex and Flexbond trademarks. Specialty Minerals is boosting sale stags of calcium carbonate, lime, specialty precipitated calcium carbonate, talc, barite and mica by between 5% and 15%, depending on the product. Degussa is boosting precipitated silica prices worldwide by $97 per metric ton for standard grades and $162 for specialty grades. Also, the Degussa Advanced Fillers & Pigments business unit will raise prices for pigment blacks and pigment black preparations produced in Europe for sales globally by 8%. Reichhold has announced a price increase of 9¢/lb for its unsaturated polyester resins and other products sold to the composites industry in North America.