Dow announces further price rise

The Dow Chemical Company will increase the price of its products by up to an additional 25% in July to offset the rise in the cost of energy and hydrocarbon feedstocks. The announcement follows a price rise of up to 20% that took effect from the beginning of this month.

Andrew N Liveris, Dow chairman and ceo, described the steps as “extremely unwelcome but entirely unavoidable”.

“The price increases we announced on 28 May helped, but they were not enough to fully cover the additional costs we are now facing. For the first half of 2008, our feedstock and energy costs are up for more than 40% compared with the same six months of last year. Even since our last announcement the cost of hydrocarbons has continued to rise and that trajectory shows no signs of changing,” he said.

The company is also moving ahead with plans to idle or reduce production at a number of manufacturing plants. Dow has reduced its worldwide ethylene oxide production by 25% and idled 30% of its North American acrylic acid production. In addition, it has reduced its European polystyrene production rate by 15% as part of its plan to idle 40% of its European styrene production capacity.

From 1 August Dow will implement a freight surcharge of $300 per shipment by truck and $600 per shipment by rail. This will apply to North American customers buying hydrocarbons and plastics where Dow currently absorbs the freight.