It seems that the producers may be getting sick and tired of not being able to pass exponentially rising costs on to customers. This morning, The Dow Chemical Company (NYSE: DOW) has announced that it will raise the price "OF ALL OF ITS PRODUCTS" by up to 20% as of June 1, 2008.
The actual amount of the raise is to be dependent upon exposure to rising costs in energy, feedstock, and transportation. It will also review all terms to all customers.
The company noted that energy and feedstock prices are up 42% year over year. In fact, Dow noted that its costs for these items was $8 Billion in 2002 and those costs would rise to $32 Billion this year.
In short, if you are dependent upon chemicals you better get those new orders in this week. The good news is that inflation is still low, at least that is what the Labor Department computer models want you to think.
If you think this is going to only come into play at Dow, guess again. Other chemical companies may follow suit as soon as today or tomorrow.
Jon Ogg
May 28, 2008
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