Dear Valued Smalley and Company Customers,
REF: PRICE INCREASE NOTIFICATION- UPDATE (EFFECTIVE APRIL 9)
We are facing unprecedented times in the construction market due to the recent escalation of raw material costs in the petrochemical industry directly affecting key chemicals used to produce construction products. In the Gulf Coast the current status reflects:
- 45% of US refining capacity is in the Gulf.
- 51% of Natural Gas production is down significantly.
- 80% of US Petrochemical production resides in the Gulf or is directly tied to it.
To date, 21 Refineries have shut down and 66 Petrochemical plants are running well below production capacity. 12 additional plants are slow, and others may shut down if they do not receive raw materials inventory soon. 25 chemical plants are citing Force Majeure on some or all products and the list is growing daily.
Affected chemistry includes but not limited to: Toluene, Xylene, Chelates, Surfactants, Glycols, Glycol Ethers, Ammonia, Chlorine, Caustic, KOH, HCl, Alcohols, Amines, Methanol, Ketones, MDI, TDI, all of which are used to make common construction products like polyurethanes, silicones, acrylics & foam insulation.
Smalley & Company have attempted to purchase products and increase inventories before supplier price increases and surcharge escalations, however, many of the purchase orders have already been allocated to backorder status due to these critical production issues. As a result, we have no option but to transfer these supplier increases into the market. The range of these increases is from 5-15%.
The April 2 price increase date has now changed to April 9. An additional 15 suppliers have also alerted Smalley & Company of price increases. Effective April 9, there will be a total of 57 suppliers with price increases. In addition, Surcharges for 10 suppliers (including Tremco, Sika, Master Builders Solutions, WR Meadows and Pecora) will also be effective April 9.
Please work with your Smalley and Company Sales or Customer Service Representatives so we can coordinate your product orders and needs to keep your projects on schedule. We apologize for any impact this has on your organization and we will do our very best to continue investing in your success with products, pricing, and service you can trust.