No Slowdown to Chem Price Run Up


Lubrizol Corp last week announced across-the-board price increases, on the heels of similaractions by Dow Chemical, Huntsman and Ciba. Meanwhile, Texas Petrochemicals said it will raise prices on polyisobutylene, Oxea announced plans to increase prices for carboxylic acids, Dow Chemical plans to raise prices for oxygenated solvents, and Kraton Polymers said it will up prices for its polymers.

Lubrizol Corp., parent of Lubrizol Additives, on Friday announced a global price increase for all product lines effective June 16, with the majority of the increases ranging from 12 percent to 20 percent. The company said the actual price increases will depend upon the specific products exposure to increasing raw material costs and energy-related production costs. Wickliffe, Ohio-based Lubrizol will review all terms with its customers.

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Lubrizol spokeswoman Julie Young explained that in terms of the Lubrizol Additives segment, the June 6 announcement does not reflect a third increase, but rather a summary of two previously announced price increases. The first one was announced in mid-February with an effective date of mid-March, Young said. The second one was announced in mid-May with an effective date of mid-June.

Over the past several years, each Lubrizol business segment has implemented numerous price increases to address rising raw material and energy costs. According to the company, recent substantial escalations in the cost of key raw materials, production-related utilities and freight necessitated the latest enterprise-wide and global price action.

Our raw material and energy costs have been impacted significantly by the unprecedented surge in crude oil and natural gas costs, both of which have increased over 40 percent since early 2008, said James Hambrick, Lubrizols chairman, president and chief executive officer. We continue to execute strategies designed to improve efficiencies and reduce operating costs, but it is essential that we implement price increases and sustain our viability as a valued supplier to our customers and their industries.

Houston-based Texas Petrochemicals said effective July 1 it will raise PIB pricing by up to 15 percent, depending on grade, and make adjustments to off-list pricing as contracts allow.

Record high and rapidly increasing oil prices have made a significant impact on the isobutane and natural gas markets, requiring TPC to implement an increase at this time, said Sandra Davis, vice president and general manager for performance products.

PIBs are used as base stocks in lubricants – sometimes as an alternative to bright stock – and as a component in metal forming fluids, gear oils, greases and two-cycle oils.

Texas Petrochemicals first entered the PIB market in May 2000 with startup of its patented process to produce a wide range of PIB products. Since then, Texas Petrochemicals has more than doubled its capacity through multiple expansion projects.

Oberhausen, Germany-based Oxea last week announced that effective July 1, or as contracts allow, it would increase off-list prices on three types of carboxylic acids used as intermediates in lubricants – n-valeric acid, 2-ethylhexanoic acid and n-heptanoic acid – by 5 to 15 cents per pound in the Americas; by 70 (U.S. $110) to 200 per metric ton in Europe; and by 120/mt to $300/mt in Asia.

Midland, Mich.-based Dow on Thursday said it would raise prices in North America for products in its oxygenated solvents portfolio by 3 to 8 cents per pound effective July 1, or as contracts allow.

Escalating raw materials and energy costs are a global phenomenon and need to be recognized, said Martin Sutcliffe, Dows global business director, glycol ethers. Given the recent surge in costs, full implementation of this price increase is a necessity.

The unprecedented rise in raw material costs is affecting all parts of the value chain, said Carol Miller, Dows global business director, solvents and intermediates.

Houston-based Kraton earlier this month said it will raise prices worldwide by 150 (U.S. $237) per metric ton, effective July 1, in Europe, Africa and the Middle East for its SIS, SIBS, SBS and O/E SBS polymers and compounds. The company said it continues to experience unprecedented cost increases derived from raw material, energy and packaging costs.

Kratons polymers are used in lubricants and other applications ranging from personal care to paving. The company has production facilities in the United States, Germany, France, the Netherlands, Brazil and Japan.

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