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Raw material prices escalate across the supply chain

Adrian Wilson

Indorama and Toray increases indicative of the overall market situation.

8th November 2021

Adrian Wilson
 |  Thailand & Japan

Transport/​Aerospace, Industrial

The Hygiene Division of Indorama Ventures is increasing prices on all polypropylene, polyester, recycled polyester, polylactic acid (PLA) and bicomponent fibres from December 1, 2021, or as contracts allow.

These fibres are used in a variety of different hygiene and technical applications worldwide and prices will increase up to 15%, depending on the specific fibre grade.

“Due to unprecedented increases in energy, wages, domestic and international freight costs, as well as finishes, additives and all packaging materials, we find it necessary to take this pricing action,” said Shachar Rachim, CEO of the Hygiene Division. “These price increases will take place independent of any resin cost changes.”

“We recognise that these increases are taking place during an unusually high period of commodity resin pricing, yet we must take this action in order to support the staffing of our operations and the continued delivery of our high-quality fibres,” added chief marketing officer Tom Zaiser. “We will monitor the dynamic, global inflationary issues making these increases necessary on a quarterly basis and adjust as possible should these pressures subside.”

Similarly, Toray Industries, is announcing a price increase on nylon 6.6 yarns and derivative fabrics for automotive airbag applications by around 20% from December 1st.

Significant shortages of the nylon 6.6 precursor adiponitrile since 2018 have caused price escalation for nylon 6.6 polymer, as the principal material in automotive airbag yarns and fabrics. The winter storm Uri, which hit North America in February 2021, caused significant global shortages again and hampered economic activity, leading to raw material prices soaring. In addition, the prices of secondary raw materials like silicone for coating airbag fabrics have rocketed due supply shortages. Rising fuel, electricity, and logistics costs are compounding challenges in the airbag business.

Toray says it has has embarked on a project to bolster its total cost competitiveness by slashing expenses and streamlining fixed and variable spending. Higher costs of primary and secondary materials and transportation outstripped savings initiatives, however, and are forcing the company to raise its prices.

www.indoramaventures.com

www.toray.com

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