Prices for raw materials continue to rise; additional increase due to strong dollar
Münster, 15 February 2017. – Armacell, a world leader in flexible insulation foams for the equipment insulation market and also a leading provider of engineered foams, increases its prices for parts of its product offering as a result of rising raw materials costs. The strong dollar and rising oil prices further impact the current price developments.
The plastics industry is currently facing significant price increases on the commodity market. Prices for butadiene, the main component of synthetic NBR caoutchouc compounds (NBR – nitrile butadiene rubber) are the most impacted. Prices for this key raw material for elastomeric insulation materials have almost doubled since the beginning of this year. This development has been amplified by the stronger demand for SBR caoutchouc (SBR – styrene butadiene rubber) as a result of the current shortage of natural rubber on the commodity market. There have also been double-digit percentage increases in the prices of propellants, antioxidants and flame retardants. For flame retardants, for example, Armacell has had to accept price rises of up to 20 percent since October 2016.
“Over recent weeks, the price increases on the commodity market have led to a sharp rise in our raw material costs. A further reason for the pressure on purchase prices is the strong dollar and the continued weakness of the euro. As we buy our raw materials in dollars, we expect this trend to continue during the next months. Furthermore, the oil price is likely to continue to rise in the medium-term,” explains Guillerme Huguen, Armacell Vice President EMEA. “We will partially pass the increase in our raw material costs on to the market. Further price increases will follow in the course of the year and absorb the material costs increase. In recent years we have made great efforts in our WAM programme (WAM – World Class Armacell Mindset) to keep costs stable and further improve our productivity – without jeopardizing our extremely high quality standards, of course. We will continue to invest in the quality and enhancement of our products. Thus ensuring, in the interest of our customers, that we remain a technology leader.”
Armacell will inform its customers of the price increases in good time.