Information about significant price increases and raw material shortages!
Further to our mail in January 2021, we would like to inform you about the completely unusual situation in which the raw material market world wide finds itself.
Excessive price increases in raw materials has immediately led to large price increases among all significant product groups, including composite raw materials.
For the time being, it is therefore necessary that we agree on prices for our products before delivery.
There are expectations that the supply of raw materials will improve after July.
Styrene has doubled in price
Depending on the goods and products our suppliers have received price increases of up to 0.60 EUR/kg. The price of styrene has doubled in price since December 2020 to the current level of 1.40 EUR/kg.The current situation is unprecedented and has a major impact on the composite industry.
The price increases for raw materials are due to among other things:
- World market demand has been much stronger than expected since the end of 2020. The strong demand has reduced inventories.
- The cold winter in the United States especially in Texas, has halted production of oil-based materials leading to further shortages.
- The drastic reduction in the supply of raw materials, combined with strong demands in Asia and the United States has led to a massive increase in the price of materials.
Force Majeure can mean a shortage of raw materials
We are likely to experience a shortage of raw materials in Q2-2021, as raw material suppliers such as BASF SE, Dow Performance Monomers, Lyondell Chemie, Sasol, Geo and Hema have all invoked Force Majeure.
At ICOM we are sorry for the price increases, the expected shortage of raw materials and the potential impact that may cause. We are working intensively to limit price increases on the products we supply to your company and we do everything we can to secure supplies.
As always we will work closely with you to overcome these challenges and will keep you informed as the situation develops over the coming months.