Covestro Puts Forward Plans for March Polycarbonate Price Hike in US

Covestro has unveiled its plans to implement a price increase for polycarbonate (PC) in the US starting March. The proposed price hike will apply to prominent brands within Covestro's portfolio, including Makrolon, Apec, Makroblend, and Bayblend. In an official communication to its customer base, the manufacturing giant outlined the rationale behind the decision, pointing to prevailing market conditions encompassing factors such as raw material costs, energy expenditures, transportation outlays, and the overarching dynamics of supply and demand.

The envisaged price adjustment is pegged at USD 0.10 per pound (equivalent to USD 0.22 per kilogram) and is slated to take effect from March 1, 2023. However, it is crucial to note that the company refrained from making definitive statements on the confirmed implementation of this proposed price increase at this early stage.

The current global landscape for PC shipments reveals an abundance of supply. This oversupply situation has persisted for six consecutive quarters, with prospects for a rebound not anticipated until the latter half of 2024. This market context further underscores the strategic considerations behind Covestro's decision, aligning pricing structures with prevailing economic conditions and industry dynamics.

Shifting the focus to Covestro's operational landscape, it's noteworthy that the company recently lifted force majeure on the supply of chlorine and caustic to two German cities. This decision marked the conclusion of a force majeure that was initially declared in August in Dormagen and subsequently in December in Uerdingen. The production capacity in Dormagen stands at 400 thousand tons of chlorine and 448 thousand tons of caustic per year. In Uerdingen, the production capacity encompasses 262 thousand tons of chlorine annually and 234 thousand tons of caustic per year. This strategic move by Covestro reflects the company's commitment to ensuring a stable and reliable supply chain for its critical products.

The global footprint of the Covestro Group extends across more than 30 production facilities distributed strategically around the world. This extensive network positions Covestro as a pivotal player in the international landscape, ensuring its ability to cater to diverse markets and meet the evolving needs of its clientele.

As Covestro navigates the complex landscape of polymer manufacturing, its proactive approach to pricing adjustments reflects a keen awareness of market dynamics. The ongoing challenges in the PC market, coupled with the broader economic context, necessitate strategic decisions to ensure sustained operational efficiency and financial resilience. The upcoming months will provide insights into the reception and impact of Covestro's proposed PC price increase, shedding light on the company's adaptability to market fluctuations and its capacity to navigate the dynamic terrain of the polymer industry.