Raw Material Shortage – Is Anyone Paying Attention?
I flew into MDW airport this week and stopped for a coffee at a very familiar establishment on my way to a customer site. I went inside and ordered my usual and realized the price had gone up 22 cents. I asked the young woman behind the counter if she realized our country was in financial turmoil and asked how prices could increase. Obviously the 19 year old didn’t have a clue, an answer or a care in the world. (Oh, to be young again.)
Have you noticed the increase in your supplies prices lately? After making a few phone calls to some old friends throughout our industry, I found out that all manufacturers are having a very hard time with their raw material suppliers. It seems this has been an issue for some time now. Both water-based and UV materials have been hit harder this year with either allocations or sales controls than at any other time I can think of.
On the UV side, there are 3 major domestic material suppliers—Sartomer, Cytec and Cognis. Cognis has been fading from the scene for several years and has lost its larger presence. The UV portion of its business was recently sold (announced March 2010) to IGM, is an Asian company. Its specialty surfactant division was sold to BASF.
From a market perspective, Monomer and Oligomer has been in tight supply. Acquiring acrylic acid and epoxy has been the issue with UV materials since the spring of 2010 and is continuing through summer, although some supplies are opening. I suspect this is due to the significant price increases everyone has seen in the last couple of months.
Inventories of acrylic acid (used in every product you buy), TPG, HD and TMP are all extremely tight. It looks like they will continue to be in short supply through 2010.