2022 Raw Material Outlook

Hurricane Ida recovery seems to be in rear view as well as the February 2021 Texas freeze disaster. The concern now is that the Texas refinery region, which was responsible for so much of the chemical inflation we have seen this year, is still not ready to endure another event like the one that occurred in 2021. Transportation continues to be a major factor impacting production, daily and weekly. Demand is still very strong while category shortages and allocations persist.

Tom Bryant, Chemical Sourcing Manager at Aerofil, advises customers to extend lead times by several weeks to orders for production if possible. “Pricing continues to be under pressure from producers with a top that seems to be near. We are hopeful that some relief will come in Q1 and Q2 2022”, said Bryant.

Chemicals of Note: Silicones & Siloxanes

• Global shortages due to United States crackdowns/boycotts on forced labor in some provinces in China continue to drive domestic increases as customers try to pull from North American producers at higher costs.
• The Dow planned maintenance shutdown at the Carrolton, Kentucky plant in October further strained supplies in Q4 2021.
• We are continuing to see price increases that are shockingly high, and a historic price increase for January 1, 2022 on intermediate fluids.
• We are still on allocation for basic intermediates but should be slowly coming out of them as we enter 2022.
• Low volume specialty emulsions are still on allocation or unavailable for months at a time due to raw material shortages needed to produce them.

Please reach out to a member of our Commercial Team if you would like to discuss any of the information contained in this post. Our team is committed to doing anything and everything we can to keep product flowing through your warehouses.