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12 Oct 2005  -  United States

Reichhold announced price increase for composites products in North America

Reichhold announced a price increase of $ 0.09 per pound for its unsaturated polyester resins and other products sold to the composites industry in North America. This increase is effective for all orders shipped on or after November 1, 2005. This is in addition to the previously announced increase which took effect October 1.

“The effects of Hurricanes Katrina and Rita have had a tremendous impact on the supply of petrochemical-based raw materials,” explains Reichhold Business Management Director Bill Schramm. “Strong demand and significantly reduced supply of these materials has further increased costs for nearly every raw material used in the production of unsaturated polyester resins.

“While costs have continued to escalate in October and November, the petrochemical industry’s ability to supply ethylene was disrupted by Hurricane Katrina,” Schramm says. Ethylene is a major building block of several glycols which are used in many unsaturated polyester resins. “Precautionary shutdowns by raw material producers in advance of Hurricane Rita caused greater than expected tightening of supply for ethylene-based products and other raw materials for unsaturated polyester resins.”

It has been estimated that 60 to 70 percent of U.S. ethylene production was taken offline in preparation for Hurricane Rita, coming very shortly after the impact of Katrina. Approximately 20-30% of ethylene production remains offline. “Many petrochemical companies in the Gulf region have declared force majeure on output from their facilities in the region,” Schramm points out.

“In addition to much higher prices for raw materials, our industry continues to face increased transportation costs,” Schramm says.

“Both Reichhold and our suppliers have been facing sharp increases in the cost of natural gas,” Schramm explains. “This has contributed to increased costs for raw materials and to increased manufacturing costs for Reichhold itself.”

“Reichhold thanks our customers for their understanding and patience as all businesses must deal with the after-effects of multiple hurricanes at this time,” Schramm says. “We are committed to meeting the needs of our customers and distributors.”

No supply interruptions expected
While supply of some raw materials has become extremely tight following Hurricanes Katrina and Rita, Reichhold does not expect that our customers will experience supply interruptions during this turbulent period.

Source : Reichhold