Petrochemical products price increase to offset cost of raw materials

Japan’s three leading chemical manufacturers each said that they would raise prices on petrochemical products to offset the soaring cost of raw materials. Mitsubishi Chemical Corp., Mitsui Chemicals Inc. and Asahi Kasei Corp. will charge more for synthetic resin and other mainstay products starting next month. The increases are expected to cost their customers an additional ¥200 billion (US$1.85 billion) a year. But with other chemical makers almost certain to roll out their own hikes, customers may have no alternative but to swallow the higher prices. Naphtha, a key raw material made from crude oil, has shot through the roof, rising ¥15,000 (US$138.64) a kiloliter since the spring. Industry leader Mitsubishi Chemical, which operates under Mitsubishi Chemical Holdings Corp., plans to raise prices on 26 key products by 10-30% — its first-ever simultaneous hike for so many top items. Polyethylene used in plastic shopping bags, for example, will cost about 17% more per kilogram, up from about 11%. (June 11, 2008)