Reichhold, Dow and AOC Announce Price Increases

05 March 2004

Reichhold, Dow and AOC have each announced price increases in their materials

“Reichhold announced a price increase of $.05 per pound on all unsaturated polyester resins sold in the U.S. and Canada effective for orders shipped on or after March 22, 2004. This increase is in addition to the February 9th increase announced in January. “The cost of raw materials has continued to rise steeply since we announced a price increase in January,” said Ken Moran, Reichhold director of sales, North America & Mexico. In addition to petroleum-based raw materials, we have experienced sharp increases in natural gas pricing, a large factor in manufacturing costs.

“Further, transportation costs associated with product delivery have increased substantially as North America has been hit with record prices for both gas and diesel fuel,” Moran continued. “On top of these increases, the rising cost of steel has raised the cost of drums.” Reichhold Senior Vice President, Commercial, Bruce Fawcett said Reichhold simply cannot absorb all of these costs. “Unsaturated polyester resin manufacturers are being hit with unrelenting raw materials increases, compounded by high energy and transportation costs,” he explained.

AOC will increase prices by US$0.05/lb on all resins, gel-coats and pigments in the USA and Canada shipped on, or after 15 March. This is in addition to the $0.04/lb increase announced last month.

Dow is raising the prices of its standard epoxy resins in Asia Pacific and Middle East, Africa and the Indian subcontinent from 1 April. Liquid epoxy resins, D.E.R. 300 series, will go up by US$200/tonne; solid epoxy resins, D.E.R. 600 series, $200/tonne; solid solution epoxy resins, D.E.R. 600 series, $150/tonne; and brominated epoxy resins, D.E.R. 500 series, by $150/tonne. Speciality resin price increases will vary depending on grade.

Dow Chemical, Midland, Michigan, USA, says rising and volatile feedstock costs are continuing to put severe pressure on epoxy producers moving into 2004.

“We are encouraged by the improving 2004 supply/demand outlook for epoxies,"" says Patrick Ho, business vice president of EP&I. ""However, the epoxy industry is experiencing tremendous pressure on cost due to rising oil and energy costs. An immediate focus for Dow is to improve the quality of the business by restoring profit margin to a sustainable level. Looking ahead, we anticipate epoxy pricing improvement across all geographies, with the Pacific region being a first priority, primarily driven by increases in demand, raw material and energy costs.”

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