(Aug. 11, 2003) — The mainstream press is suddenly hot on the trail of the natural gas pricing story. The coverage might seem a bit belated to processors that lived through the price surcharge trend earlier this year.
Still, the coverage is welcome. A spike in natural gas prices will cool the economy almost as fast as an increase in gasoline prices.
It's been well-documented that North American resin suppliers have traditionally enjoyed a cost advantage because they depend on natural gas, rather than oil, for many of their monomer feedstocks. As natural gas prices have risen, that advantage has slipped away.
Nevertheless, keep in mind one fact that most of the recent business press coverage seems to ignore: Pricing is determined by both supply and demand, not just supply. That's Pricing 101.
That said, the government can and should take steps to improve the supply side of the equation. Bringing the issue to the attention of the general public can only help.