12 September 2005 16:08 [Source: ICIS news]
HOUSTON (ICIS news)--DuPont said on Monday it plans to raise prices for all products, citing skyrocketing energy and feedstock costs.?xml:namespace>
DuPont spokesperson Michelle Reardon said the increases would cover 35,000 products. She said she did not have information regarding individual price increases.
“The information is under review. Each business needs to make a determination in 30 days on what they are going to do,” Reardon said.
DuPont corporate economist Robert Shrouds said in a report released Monday that record-high energy prices, which have been made worse Hurricane Katrina, will be a factor for the foreseeable future.
“Prices of crude oil, natural gas, and refined petroleum products have risen to record levels and are expected to remain elevated. Even when adjusted for inflation, crude oil prices are higher than at any time except the 1979-82 period, and natural gas prices are at record highs,” Shrouds said.
“We are facing the unfortunate reality that the world has truly changed and energy prices are not receding, nor do we see signs of lower energy costs in the near future,” said DuPont chief marketing officer Diane Gulyas. “This supply shock has affected all of our operations and requires a comprehensive strategy that includes this price initiative coupled with our ongoing productivity improvements and energy conservation efforts.”
The last time DuPont made such a concerted price increase plan was during the energy price increases of the late 1970's/early 1980's, Gulyas said.
Gulyas said energy costs are expected to continue increases through 2006 and in 2007. "We saw the situation was not only not abating, it was getting worse," she said.
The price increases will ripple through DuPont's 80 business units. Customers will get more specific price information during the next 30 days, Gulyas said.
According to Shroud’s report, crude oil prices for 2006 are expected to be above 2005’s average price of $59/bbl which is a 44% increase over the already record high $41/bbl for 2004. US natural gas prices have doubled in less than 12 months prior to the hurricane and post-Katrina, have almost tripled. Natural gas prices moved above $12/m Btu in August, and are expected to average $8/m Btu for all of 2005, 33% higher than the previous record $6/m Btu average price for 2004.
A $10 increase in the price of a barrel of oil increases costs to the ?xml:namespace>
“Despite recent increases, DuPont’s worldwide selling prices relative to industrial chemical prices have never been lower than they are now,” Shroud’s report said. “In the past, DuPont offset much of the industrial chemical and energy cost increases with productivity improvements and cost reduction programmes versus passing the full impact to customers.”
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