Reeling from soaring energy costs, DuPont said yesterday it would raise prices on about 35,000 products that go into kitchen countertops...
PHILADELPHIA — Reeling from soaring energy costs, DuPont said yesterday it would raise prices on about 35,000 products that go into kitchen countertops, police safety vests, cellphones and a host of other items.
The company would not say how much prices will rise on specific products but said the first of the increases could come as quickly as next week. DuPont’s 80 business units will make the changes, the company said.
The announcement by DuPont, one of the nation’s largest industrial companies, is evidence of inflationary pressure building from oil and natural-gas prices.
Consumer-price inflation was running at an annual rate of 3.2 percent until this summer. In July it increased to an annualized rate of 6 percent because of higher energy prices, said Richard DeKaser, chief economist with National City in Cleveland. He said he expects the elevated inflation rate to remain for the next few months but then decline as energy prices do.
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DuPont sells some of its products, such as Tyvek house wrap, to consumers in retail stores, but most of its products are distributed through other companies or sold as raw materials to manufacturers. DuPont also has a large biotech-seed business in the heartland.
DuPont, which acknowledged this summer that it had underestimated how quickly crude-oil prices would rise, says higher oil and natural-gas prices could add $13.5 billion in raw-material costs to U.S. chemical companies for the year.
Even before Hurricane Katrina, which damaged production rigs in the Gulf of Mexico and refineries on the Gulf Coast, tight global supplies were pressuring energy prices.
“This is real, and it’s here to stay,” Diane Gulyas, DuPont’s chief marketing officer, said yesterday in an interview. “It goes beyond Katrina. Katrina certainly exacerbated a bad situation.”
DuPont has concluded that there is an imbalance between growing energy consumption worldwide and new energy supplies, and that this will keep prices high for some time, Gulyas said.
Crude oil closed at $63.34 per barrel yesterday.
Evoking a phrase common in the 1970s, Kevin Swift, chief economist with the trade group American Chemistry Council, said yesterday: “This is a supply shock.”
The chemical industry “consumes an awful lot of energy,” he said, and natural gas is a big concern to chemical companies.