WYANDOTTE, Mich. (April 30)—BASF Corp. has implemented a surcharge, effective May 1, on methylene diphenyl diisocyanate and polyol products it sells in North America to help absorb unprecedented cost increases in energy and feedstocks.
BASF´s monthly MDI surcharge will be $0.005 per pound for every $0.10 per gallon increase in benzene over the base price of $1.50 per gallon, using the prior month´s CMAI NAFTA benzene contract settlement. The monthly polyol surcharge will be $0.005 per pound for every $0.01 per pound increase in propylene over the base price of $0.20 per pound.
"The price of crude oil and its derivatives benzene and propylene, which are used in the production of MDIs and polyols, has reached historically high levels," said Lawrence Berkowski, director of BASF´s urethane chemicals business in North America. "BASF can no longer absorb the increases in the hope that costs will fall back to the levels of the 1990s."
In addition, Berkowski said, growing demand spurred by a strengthening global economy has strained BASF´s production capacity of MDIs and polyols at a time when poor profitability has curtailed the investments needed for increased production