Pricing on coatings, sealants raw materials stabilising – RPM CEO

08 January 2014 20:43 Source:ICIS News

HOUSTON (ICIS)--Pricing for raw materials used to make coatings and sealants should be stable in the near-term, the CEO of US producer RPM International said on Wednesday.

The commodity chemical pricing “super cycle” is leading to a moderation in prices that may be “a new norm”, Frank Sullivan told analysts during RPM’s fiscal Q2 earnings conference call.

“We're in an environment relative to raw materials where we have fought for a decade, along with everybody in our industry, through a commodity super cycle, and it was exacerbated in [2005, 2006] by the impact of the hurricanes and the chemical industry in the Gulf Coast, rise of China and India, consolidation of suppliers,” Sullivan said.

“Commodity cycles are still commodity cycles. And with the advent of significant capacity coming on, particularly in Asia, I think whether it's mining, metals, or in our case, commodity chemicals, I think you're seeing a moderation in prices,” the CEO added.

Propylene and polypropylene (PP) are the backbone of many of the chemical raw materials RPM purchases, and Sullivan in a previous earnings call had lamented rising costs for the petrochemicals.

But the CEO on Wednesday said that stabilising oil and natural gas prices are bringing about stable raw material costs for RPM.

“Our outlook is stable raw material prices at the levels they're at now,” Sullivan said.

By Jeremy Pafford