These increases impact each and every raw material used in all resin manufacturing processes, resulting in this necessary price increase. We will continuously work hard to limit the impact of rising costs while making investments necessary to continue the supply of innovative, high quality products. The basic effect in the chemical industry that is driving these increases is the de-coupling of benzene pricing from the price of oil that has happened in 2012.
The resulting increases in phenol, solvents and MDI have been substantial and continuous. Several of these components are sitting at a historically high cost basis as we end 2012.
The outlook for 2013 is more of the same. Currently only furfuryl alcohol based products (furan resins) are experiencing any cost relief – relief that has also been passed on to our customer base. While 2013 starts with a high degree of uncertainty, we have been universally informed that if the economy in the NAFTA region picks up steam, we can expect further upward pressure on benzene costs. Almost all chemical products necessary for resin production are now priced on a formula that is based on the month end benzene prices – so for the future you can see where resin prices are heading by simply tracking benzene costs as listed online at websites such as:
We are doing all we can to mitigate the full extent of these cost increases, and this can be seen in that while benzene sits at historic highs, resin prices do not. We appreciate your continued business and feel free to contact us with any questions you may have.