High natural gas and feedstock prices have propelled several polyurethane companies to announce price hikes in the past month.
With natural gas costs at $10.50 per thousand cubic feet in December, up from about $2.50 in the same month in 1999, and a barrel of crude oil costing about $30 in mid-January, up from $19 at the same time in 2000, firms are dealing with extra expenses to operate plants and manufacture products.
Bayer Corp.'s Polyurethane Division said Jan. 17 it increased prices 8-12 cents per pound on all toluene diisocyanate, diphenylmethane diisocyanate, polyol products and polyurethane systems as a direct result of increased material and feedstock prices.
Bayer's natural gas costs have tripled in less than two years and doubled in the past six months due to record-high prices, a company statement said.
"We are an intensive user of natural gas," a Bayer spokesman said. "We not only use it as an energy source, we also use it as a feedstock for the manufacturing of our TDI products — and TDI is a high-volume product."
The company said it "has sought to obtain the lowest possible raw material and energy costs," but Bayer's margins have eroded significantly in the North American Free Trade Agreement regions, the release said.
Air Product and Chemicals Inc. said Jan. 24 it would increase prepolymer prices 4-8 cents per pound Feb. 23, depending on material backbone prices, due to hikes in energy and transportation costs. At this time the firm is seeing a slight relief in cost pressures, a company spokeswoman said.
"At the end of the day, our goal is to price fairly to all customers while maintaining competitiveness globally," she said.
Huntsman Polyurethanes said Jan. 24 it would increase prices 5 percent effective Feb. 15 on its extrusion and injection molding grades of thermoplastic PUs. It is the firm's first increase on those lines in five years.
Molded Dimensions Inc., a custom molder of cast urethane parts, said processors will be affected by the material price increases "especially because we're going through a recession," said Jay Meili, Molded Dimensions owner and chief executive officer.
"We'll have to eat the increase because we can't pass it on to customers," he said. "And we can't challenge it effectively."
