By Liz White, UT staff
London-Stepan Co. has announced that it is raising prices for its range of aromatic polyester polyols, by 10 percent from 10 June, driven by higher raw materials prices.
The chemicals group said prices for its two basic raw materials to make APPs-orthoxylene and diethylene glycol (DEG)-have risen by an average of 14 percent over those of Q3 of 2005. Despite this, prices for APPs have dropped during this period, due to competitive pressures resulting from the overall decline in total market volume," according to Roger Stubbs, London-based director of the group's European Polymers operation.
Stubbs explained that although the increases in orthoxylene prices had been predicted in line with oil, we expected DEG to soften due to large new capacity coming on stream in the Middle East in Q2 2006."
But delays in the increased output from those plants coupled with outages at European manufacturers have led to the DEG price remaining obstinately high, Stubbs commented.
The Stepan executive stressed that suppliers to the PU sector are very mindful of the damage that was done to the PU insulation market when MDI prices went up to their record levels." As a result, he added, they have been reluctant to make moves that might limit the recovery" seen since MDI prices started falling.
Nevertheless, Stepan now feels its margin levels are at a point where the company has no choice but to put the 10% increase into effect. We also believe that with the relief on MDI, this move on polyols should not have any negative impact on the PU insulation market share," Stubbs concluded.