Chemical monitor: April 2006
Selling prices have risen rapidly in the chemical industry during the past few months as a result of sharp increases in production costs. However, this trend has slowed down recently, and it is not clear how fast prices will rise in the future.
Selling prices have risen rapidly in the chemical industry during the past few months as a result of sharp increases in production costs. However, this trend has slowed down recently, and it is not clear how fast prices will rise in the future.
In December 2005 selling prices in the chemical sector went up by an average of 0.5%, following an increase of 1.2% in the previous month. Moreover, the underlying trend has remained fairly stable, with a gain of 5.2% compared with 2004.
Intermediate chemicals prices went up quite rapidly, with organics showing an above-average increase of 2.7% in December. However, price rises for other products were moderate; for instance, prices for pharmaceuticals advanced by only 0.4% in December compared with 0.9% in November, and actually fell by 2.7% on an annual basis.
The upward trend in chemical costs also showed signs of slowing down with a rise of 0.6% in December as against 3% the month before. Nevertheless, costs were considerably higher on a yearly basis, with a jump of 11.5% compared with 12 months ago.
The trend for intermediate costs was more subdued, with a rise of 0.8% in December compared with an increase of 3.8% in the previous four weeks. Pharmaceuticals costs also slowed down, recording a gain of 0.6% compared with 1.9% in November .
It appears that costs of fuel and oil moderated following a period of sharp increases. Thus the price of fuel went up by 4.1% in December following a jump of 20% in the previous month, while the price for crude oil advanced by an average of 2.4%. Moreover, imports of certain raw materials, especially heavy chemicals, were slightly easier in this period, falling by 0.1%.