Feedstock Price Volatility and How to Deal with It

What is Driving Feedstock Price Increases and Volatility  

Chemical producers have witnessed a dramatic run-up in their feedstock prices in the last four years, whether natural gas, crude oil derivatives such as naphtha, or petrochemicals such as benzene. The US chemical industry s feedstock bill in 2004, for example, was up USD 31 billion compared with 2002, representing a 57 percent increase in the net sales value of these basic chemicals. This dramatic overall surge conceals a number of different drivers, each with its own dynamics (Fig. 16.1). Basic hydrocarbon costs were up 72 percent, led by crude oil and nat- 

Value Creation Strategiesforthe Chemical Industry. 2nd Edition. F. Budde, U.-H. Felcht, H. Frankemolle (Eds.) Copyright 2006 WILEY-VCH Veriag GmbH Co. KGaA, Weinheim ISBN 3-527-31266-8 

Crude oil Natural Refining Hydroincrease gas margins/ carbon increase octane feed 

Margin Total basic fly-ups chemical in basic cost chemicals increase 

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