International hikes marine coatings prices
International Marine Coatings says it has initiated product price rises of between 5% and 15% to meet the continuing rise in raw material costs.
Brian Smith, International Coatings Marine Commercial Director called the decision "regrettable but inevitable in the current market. The costs of many raw materials critical to our business have increased significantly over the past year and are expected to increase further throughout 2004."
Key raw materials used in today's marine coatings include copper, zinc, epoxy resins, titanium dioxide and specialist solvents--all of which have steadily increased in price. Epoxy resins producers are launching a range of price increases to counter the impact of high energy and feedstock costs. Titanium dioxide producers have already announced a $150 per tonne rise and zinc prices have risen by over 30%. For solvent stock, increased tension in the Middle East and continuing high demand saw the price of crude oil rise 5% last week alone to hit $40 per barrel.
Of particular concern, sas International, is the price of copper--iused extensively in antifouling products. World demand for copper is currently outstripping supply by an estimated 150,000 tonnes. Demand in China, where copper consumption increased by 20 percentin 2003, and is predicted to increase by a further 12 percentin 2004, has pushed copper prices up 40 percent to over $3,000 per tonne.
"The price of copper is largely driven by the needs of the building and electrical industries," said Smith. "Since the use of copper in marine antifouling products is insignificant in terms of total global consumption, our businesses do not enjoy economies of scale and we cannot leverage our purchasing strength for customer benefit."
The situation is further exacerbated by the continuing decline in the value of the dollar and the increase in steel prices.
"In the last two years," says International, "the dollar has declined by up to 29 percent against other key currencies. With most global trade priced in dollars this of course means further increases in the costs of raw materials. Since October 2003, steel prices have risen by $ 300 per tonne and this rise has impacted significantly on our paint can packaging costs."
International Coatings says that "faced with such large increases in the cost of doing business we have little choice but to pass part of these increases on to our customers."