Increasing scarcity and cost of base stocks make product price rises

Aggravated market environment

The situation has been exacerbated by exceptionally high levels of capacity utilisation coinciding with numerous outages suffered by chemical commodity manufacturers, the result of which has been a general overheating of the markets. Many companies have reported force majeure and are currently unable to deliver. In the USA, for example, winter storms Uri and Viola of mid-February paralysed large parts of the oil and chemical industries, with many companies still struggling with the consequences of these extreme weather events. Added to this, supply chains are being constantly disrupted due to a scarcity of cargo capacities, congestion at seaports, severe delays in delivery schedules and a shortage of return containers – all of which is funnelling into further increases in logistics service and freight costs.

No reversal in sight

In view of the lack of any likely relaxation of this exceptional situation, many companies have, over the last few weeks, implemented multiple price increases for base stocks such as silicone products, silanes, acrylates, resins and similar. In many cases prices of such commodities have actually quadrupled.

 MC-Bauchemie announces price increases

MC-Bauchemie has no choice but to accept that these extreme price increases for its inputs are unlikely to be temporary. The globally active company intends to do everything in its power to ensure deliveries of the majority of its products, accompanied by the high level of service that its customers have come to expect. Given the current situation, the company has assigned the highest priority to safeguarding this supply reliability. Therefore, and to enable economic production at current base stock prices, MC-Bauchemie and its affiliated companies intend as of 01 April 2021 to increase prices by up to 15 per cent in product categories affected by base stock scarcity. In the coming days, affected customers will receive detailed information from their personal account managers and sales contacts about which products are involved and to what extent they are impacted.