Chemical monitor

Prices in the chemical industry have been steady and showed little change. The market for some products has become more competitive and many firms have been reluctant to raise their prices, even though certain production costs have risen over the past few months.

During June, the index for selling prices was stable and averaged 96.2, which was about the same as for the previous month. Compared to the previous year, prices have gone up by only 0.9% for the chemical industry as a whole.

For intermediate products, their prices went up by 0.5% in June as against an increase of 0.2% in the previous month.

During June, the index for chemical costs advanced by 0.1%, having fallen by 0.3% in May. The longer term trend for costs showed an increase of 1.7% compared to a year ago.

A major factor has been the rise in crude oil prices, which went up by 1% in June, though in recent weeks the trend for oil products has been downward on an international basis.

Costs for pharmaceutical products rose, increasing by 0.2% in June having fallen by 0.1% in May. For intermediate products, their costs increased by 0.3% in June, having declined by 0.2% in the previous four weeks.

The pressure on margins for many chemical products will continue over the medium term, especially as wages and salaries have increased rapidly in recent months, along with fuel costs. British chemical companies will have to watch their margins carefully, and step up their productivity to maintain their profits at an adequate level in the coming months.