MIDLAND, Mich. (Aug. 10)—Dow Chemical Co. will implement a surcharge on all shipments of its methylene diphenyl diisocyanate products in the U.S. and Canada, effective immediately, "as a result of the unprecedented high cost of benzene."
The surcharge will be 0.5 cents per pound for every 10 cents per gallon increase in benzene over the base price of $1.50 per gallon, Dow said. The prior month's CMAI benzene contract price settlement will be used to determine the surcharge, Dow added. For example, in July, the CMAI contract price for benzene was $3.07 per gallon, resulting in a surcharge for August of 8 cents per pound.
The surcharge will remain in effect until further notice, Dow said.
"This surcharge will only offset a portion of the total impact that benzene cost has on Dow's production of MDI. Natural gas, nitric acid and chlorine also greatly impact MDI production costs," said Charles Reardon, product market manager, Dow Polyurethanes North America. "Historically, benzene prices have been approximately $1.26 per gallon, and have jumped in August to $3.75 per gallon and are projected to remain at high levels."