Sharply rising raw material costs have forced marine coatings makers such as Hempel and International Coatings to institute price increases ranging between five and 15%.
According to Hempel, prices for raw materials, such as epoxy resins, have increased markedly over the past months, some even as much as 30%. In addition, the price of metal is also under pressure, in particular zinc and copper. These metals constitute a major part of the cost of many protective and marine coatings. The increases vary from product to product depending on raw materials.
International has also initiated similar price increases to meet the continuing rise in raw material costs.
“The decision to increase product prices is regrettable but inevitable in the current market,” said Brian Smith, International Coatings’ marine commercial director. “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.”
According to Smith, world demand for copper is currently outstripping supply by an estimated 150K tons. Demand in China—where copper consumption increased by 20% in 2003 and is predicted to increase by a another 12% in 2004—has pushed copper prices up 40% to more than $3000 per ton—its highest level since 1995, according to Smith.
“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.”