Transportation and Energy Costs Increase Personal Care Prices

Price increases are occurring all over the industry. The rate hikes are the result of high gas prices, high energy costs and increasing raw material costs.

Lubrizol announced on June 6, 2008, that the prices for all of its product lines would be increasing, effective June 16. The majority of its increases will be from 12-20%, depending upon the specific product's exposure to increasing raw material costs and energy-related production costs. According to the company, recent price increases are a result of escalations in the cost of key raw materials, production-related utilities and freight.

On June 9, 2008, BASF Corp. announced it will increase its cosmetic polymers by 30%. Similarly to Lubrizol, BASF raised prices due to raw material and energy price increases.

The price increases are not just taking place at the large companies. Solvay Chemicals Inc. announced on June 6, 2008, that it will increase its price of hydrogen peroxide. The company cites transportation and raw material costs as the source of its increase. Also, strong export and domestic demand is driving the company's capacity utilization of plant and transportation assets to extremely high levels.

During this time of economic recession, it seems all raw material manufacturers can do is raise prices to go with the flow. However, what will this do to the personal care industry? Hopefully, these price increases will at some point plateau before it becomes too expensive to make a cosmetic.

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