BASF concerned about the effects of high benzene prices on demand for plastics
Business to be turned down if necessary
BASF will have to continue to raise the prices for its styrene-based and nylon products because of the continuously increasing price of benzene. If it is not possible to achieve these prices in the market and thus pass on the enormous increase in the cost of benzene to customers, then the styrenics and Performance Polymers divisions will turn down business if necessary.
"We have only partially passed on the increases in the price of raw materials, especially benzene, in recent months to our plastics customers, and our margins have suffered as a result. If we are unable to implement higher sales prices in the short term, we see ourselves forced to forego these orders," said Wilfried Haensel, head of the Styrenic Polymers Regional Business Unit Europe and Tilman Krauch, head of the Polyamide & Intermediates Global Business Unit. "These measures are necessary for BASF to remain a long-term partner to its customers", they said.
Benzene is one of the most important raw materials for numerous plastics in BASF's product range. Although benzene prices have been increasingly volatile over the last two years, the price has suddenly more than doubled since the beginning of 2004 and is now at a record high. To date, the resulting increase in the cost of producing styrenics (e.g. PS, EPS, ABS), nylon (otherwise known as polyamide, PA; base polymers and engineering plastics) and caprolactam has only been partially passed on to the market through price increases. This has resulted in a completely unsatisfactory margin situation in these two large business areas.
Styrenics such as polystyrene (PS), expandable polystyrene (EPS: Styropor®) and acrylonitrile-butadiene-styrene copolymer (ABS), as well as the engineering plastic nylon are used in a variety of everyday and technical applications such as packaging, construction, automotive and electrical engineering; in applications for homes, offices and leisure time; and in the production of textiles. Caprolactam is used to produce nylon 6.
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