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DOW Chemical To Increase Raw Materials Prices By 20%

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posted on May, 30 2008 @ 05:58 PM
Just a heads up: This will affect the end price of many shelf good products such as shampoos, cleaners, storage products and packaging. Other producers will likely follow suit so it will impact shelf goods across the full retail spectrum. It's not just food and gas anymore so it will be interesting to see how it plays with the inflation index. I think the CEO's comments on our energy policy are particularly important and worrisome.

May 28 (Bloomberg) -- Dow Chemical Co., the largest U.S. chemical maker, will raise prices the most in the company's 111- year history because of surging costs for energy and raw materials used to make Styrofoam, pesticides and plastics.

The ``unparalleled'' increases of as much as 20 percent on all of Dow's 3,200 products are needed after a 42 percent jump in first-quarter spending on raw materials and energy, Chief Executive Officer Andrew Liveris said today. The increases take effect June 1, the company said in a statement.

Dow plans to pass on some of an expected $7.4 billion increase in energy and materials costs this year that Liveris said is due partly to the U.S. government's failure to develop policies to solve a ``true energy crisis.'' Higher food, fuel and metals prices are contributing to inflation and helped boost U.S. consumer prices 3.9 percent in the year ended in April.

``This is our largest across-the-board increase,'' Liveris said today in an interview at the company's headquarters in Midland, Michigan. ``We have a tsunami landing on us here,'' he said, adding that Dow has been boosting prices for four years.

posted on May, 30 2008 @ 06:05 PM
Wow, starred and flagged as I think the importance of this is lost on many. As you mentioned, other suppliers of raw materials will be following shortly. This increase has the potential to increase the price of nearly everything we buy.

From a cup of coffee at 7-11 to a new home. All at a time when our dollars are worth less and less.

posted on May, 30 2008 @ 06:09 PM
reply to post by Unit541

You are absolutely right. I was thinking more about my trip to the grocery store or the Target but - yeah - it will be just about everything as the Dow link will confirm.

posted on May, 31 2008 @ 10:55 PM
How long will the government sit idly by and allow the outrageousness to continue with the rising cost of fuel? Of course it will affect all consumer prices at some point! How much can we take when it took so long to raise the minimum wage, which now basically means little to nothing? I feel so sorry for a single income household that only brings in a minimum wage salary. Granted we've been pretty decadent in our instant gratification and throw away lifestyles, but at least there has been the realization that we need to do more to " go green". Back to the govt issue, I feel that we, the people need to be giving them an earful everyday to get them to take some action.

posted on Jun, 27 2008 @ 09:56 AM
So in less than one month, it's happening again. What does this mean to the costs of goods three to six months down the road? It's bad.

Dow Chemical Co. announced its second comprehensive price hike in less than a month to offset the "relentless rise" in costs for energy and related raw materials.

The Midland-based chemical company announced Tuesday it will raise prices by as much as 25% next month. That follows price increases of up to 20% that took effect June 1…

Dow said it's also adding a freight surcharge for North American customers of $300 per shipment by truck and $600 per shipment by rail effective Aug. 1. The company said it will add the surcharges in other regions later this year.

Dow also announced it's moving ahead with plans to temporarily idle or cut production at a number of manufacturing plants. Cost cuts at Dow's automotive unit includes its work force and plants in light of a North American sales decline.

Chairman and Chief Executive Andrew Liveris said in a statement that the steps are "extremely unwelcome but entirely unavoidable" as global energy costs surge.

"The price increases we announced May 28 helped, but they were not enough to fully cover the additional costs we are now facing," he said.

"Even since our last announcement, the cost of hydrocarbons has continued to rise, and that trajectory shows no sign of changing. We must restore margins in our businesses, both through price increases and the reduction of operating costs at certain production facilities."

posted on Jun, 30 2008 @ 02:44 PM
Seems like they are all racing to the finish line to see who can crash the economy first!

posted on Jul, 16 2008 @ 09:57 AM
And this is how it plays out. No big surprise I guess. But it's only going to go up even more as the products on the shelf now were produced weeks or months ago, with energy costs at that time. What will the prices be by the end of the year?

Consumer prices shot up in June at the second fastest pace in 26 years with two-thirds of the surge blamed on soaring energy prices.

The Labor Department reported that consumer prices jumped 1.1 percent last month, much worse than had been expected. Energy prices rocketed upward by 6.6 percent, reflecting big gains for gasoline, home heating oil and natural gas.

The big rise in prices cut deeply into consumers' earning power with average weekly wages, after adjusting for inflation, dropping by 0.9 percent in June, the biggest monthly decline since 1984.

The 1.1 percent June price increase was the second largest monthly advance in the past 26 years, surpassed only by a 1.3 percent gain in September 2005 from a jolt to energy costs after Hurricane Katrina.

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