Chemical Prices Still Going Up


Several more chemical companies announced price increases the past week for additives used in the lubricant industry. Sources said additive costs may keep going up, even if crude oil prices do not.

Crompton Corp.s Petroleum Additives business announced Thursday that it will raise barium sulfonate prices between 29 percent and 38 percent, effective Oct. 1. Officials said the changes – which affect neutral and basic barium sulfonates sold under the Petronate brand – are due to higher costs for raw materials and energy.

We have been operating with low or negative margins on barium sulfonates primarily due to unprecedented and continuing increases in raw material and energy costs over the last 24 months, said Kirk Schlup, global market manager of industrial additives for the Petroleum Additives business. These costs have shown no signs of either reversing themselves to more historical levels or topping out in the near future.

Barium sulfonates are used in lubricant applications to provide corrosion protection. Crompton is based in Middlebury, Conn.

Dow Chemical Co. said Monday that it will increase off-list prices of diphenyl oxide by 15 cents per pound, effective Oct. 1. Dow said it was acting to restore margins that have been eroded by rising costs for raw materials, energy and transportation. The Midland, Mich., company sells diphenyl oxide for use in making heat transfer fluids, brominated fire retardants and surfactants.

Pilot Chemical Co. announced Sept. 10 that it will impose increases of 7 and 8 cents per pound, effective Oct. 15, on sulfonate surfactants sold into the lubricant market. The Santa Fe Springs, Calif., company also cited higher raw material costs.

Costs for a wide variety of lubricant additives have risen during the past several months, largely driven by steep jumps in crude oil prices. Crude prices have edged back upward the past three weeks, but are still more than $2 per barrel under records highs set in mid-August. Still, chemical company representatives cautioned that a leveling off of crude prices does not necessarily mean an end to hikes for lubricant additives. Pilot Vice President of Marketing Neil A. Burns said aromatics such as benzene, toluene and xylene are the main raw materials used by Pilot. He noted, for example, that benzenes cost relative to crude has increased greatly over the past year.

The relationship between crude and benzene has changed so much, its really difficult to predict whats going to happen, Burns said. You dont know if the multiple is going to stay where it is now, go back to what it was, or what.

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