US Sherwin-Williams raises forecast for feedstock prices

20 April 2017 20:42 Source:ICIS News

US Sherwin-Williams raises forecast for feedstock pricesHOUSTON (ICIS)--Sherwin-Williams now expects raw-material prices to rise by the mid-single digits, up from its forecast of low-single-digit inflation it made earlier in the year, the CEO of the US-based paints and coatings producer said on Thursday.

Sherwin-Williams made the earlier forecast during its Q4 earnings conference call.

It raised its estimate because of an increase in oil prices, low supplies of titanium dioxide (TiO2), higher prices for propylene in the first quarter and tight supplies for some of the monomers used to make latex, said John Morikis, CEO. He made his comments during the company's first-quarter-earnings conference call.

Morikis did not specify the latex monomer. However, US prices for butadiene (BD) have risen sharply this year because of tight supplies. BD maintained its much of its gains despite the recent drop in April contract prices.

Other monomers that tightened include vinyl acetate monomer (VAM) and methyl methacrylate (MMA), said Bob Wells, senior vice president, corporate communications and public affairs.

For TiO2, although inventories are low, Sherwin-Williams has not changed its outlook for pricing on the pigment, Wells said. The company still expects TiO2 prices will rise by the mid- to upper-single digits, he said.

Year-on year-inflation will likely peak in the second quarter, Wells said. "Then we start rolling through the price increases taken in TiO2 last year, which the year-over-inflation should ease somewhat in the second half."

Sherwin-Williams had proposed price increases of 3-5% in December, and so far, traction has been better than expected, said Allen Mistysyn, chief financial officer.

Morikis said so far, the company has not made any more price-hike announcements.

Photo by Juice/REX/Shutterstock

By Al Greenwood