Sky-high oil prices are starting to affect prices of higher-priced thermoset and high-temperature plastics in the same way they've affected commodity markets since the start of the year.
Global prices for urea molding compounds are set to climb an average of 9 cents per pound June 1, according to recent announcements from Aicar SA of Barcelona, Spain, and BIP plc of Oldbury, England. UMC makers Perstorp Compounds Inc. of Florence, Mass., Carmel Chemicals Ltd. of Atlit, Israel, and Thai KK Industry Co. Ltd. of Bangkok, Thailand, are expected to follow suit.
``These materials had been able to resist price increases for a while, but now they can't hold out anymore,'' said a U.S. thermoset resin buyer in the Southeast.
West Texas intermediate crude oil was trading at more than $41 per barrel May 25, while natural gas was at almost $7 per million Btu. By comparison, oil was just under $30 per barrel a year ago, with natural gas prices just below $6.
Officials with thermoset maker AOC of Collierville, Tenn., referred to that scenario in a May 10 news release that announced their plans to raise prices for unsaturated polyesters and vinyl esters by 4 cents per pound June 1.
``It is no longer possible to absorb these cost increases,'' officials said, adding that high crude prices affect AOC's costs for such raw materials as specialty glycols, organic acids, monomers, anhydrides, pigments and micro additives.
The story was the same at Durez Corp. of Dallas, where officials began to work on a 12 cent-per-pound price increase for phenolic resins May 1. Competitor Plastics Engineering Co. (Plenco) of Sheboygan, Wis., took similar action.
Plenco also raised prices of phenolic molding compounds by 5 cents a pound in May, marketing manager Stuart Brotz said in a recent phone interview.
``The increases were only to cover the increases in phenol pricing,'' Brotz said. ``The market for phenol is very tight. We didn't even try to cover increases in formaldehyde and other materials.''
The phenol situation has created a situation in which phenolic users are affected by the availability of phenol, as well as larger crude oil/natural gas factors, Brotz added.
Elsewhere, DuPont Co. and Kraton Polymers are taking steps to increase prices of some of the specialty plastics they produce.
Wilmington, Del.-based DuPont plans to raise global prices for its Teflon-brand fluoropolymers by 20 percent June 1. Officials at DuPont, the world's largest fluoropolymer maker, said the increase ``reflects higher raw material costs and the high value that these products deliver to end-use products.''
Houston-based Kraton intends to raise prices for its styrenic block colpolymers for paving, roofing and adhesives customers by 6 cents per pound June 15. The increase will allow Kraton ``to preserve customer service levels and continue to invest in the business,'' North American sales director Jim Dieter said.