Dow implements MDI surcharge in North America

By David Reed, UT EditorMidland, Michigan-Effective immediately, The Dow Chemical Co. will implement a surcharge on all shipments of its MDI (methylene diphenyl diisocyanate) products in the United States and Canada, “as a result of the unprecedented high cost of benzene,” according to a 9 Aug statement.The surcharge will be $.005 cent per pound for every $0.10 per gallon increase in benzene over the base price of $1.50 per gallon, the statement indicated. 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, as a result the surcharge on MDI for August will be $0.08/lb (about €0.14/kg). The surcharge will remain in effect until further notice, the Dow statement added. “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.”A strengthening global economy has made an already tight MDI supply even more so, across the globe,” he added.”