Chemical Monitor - March 2004

The rise in selling prices for leading chemicals has shown signs of speeding up. In particular, prices of organic chemicals have gone up markedly, as a result of the continued increase in oil costs.

During December, the index for selling prices advanced by an average of 0.3% in value as against an increase of 0.1% a month ago. The underlying trend has also been gaining momentum, with prices going up by 3.3% on an annual basis.

Pharmaceutical prices were static following a fall of 0.2% in November. Moreover, the underlying trend has stabilised at 2.3% compared with a year ago. However, prices for intermediate products advanced by 0.5% in December following an increase of 0.2% the previous month.

The increase in selling prices was not surprising and was partly due to the continued a rise in chemical costs. The index for raw materials and fuels advanced by 0.3% in December, having already gone up by 0.5% the previous month. The underlying trend was also higher, averaging 3.5% up on a year ago.

In December fuel costs went up by 2.4% while crude oil prices rose by 0.8%. Imported chemicals, however, were unchanged, although prices for imported metals increased by 0.7%.

Costs for pharmaceuticals rose by 0.2% in December and by 3.5% compared with a year ago. Costs for intermediate products continued to climb and moved up by 0.4% in December following an increase of 0.7% in November. On average, intermediate costs were 3.9% higher than the previous year.

Evidently, some chemical manufacturers have been hit hard by rising costs and by falling profit margins. As a result, they have implemented higher prices for some of their products on a selective basis.