Development in prices for raw materials

Customer Information July 2018

The market and prices for the four main raw materials for production of pre-insulated pipe systems are influenced by demand and supply; however, also by a range of global events. Therefore, predictions of price development for these materials are rather difficult. This also applies to the situation for the first half year of 2018, where the prices have developed somewhat different to our expectations by end of last year.

However, the total effects on the price for the pre-insulated pipe systems are within the limits and assumptions underlying LOGSTOR Price List 02/18. Below, see a brief description of the situation for each of the four components.

  • Steel – price has increased more than we expected. It is now around 5% higher than in last quarter of 2017. The implementation of US tariffs on European steel leaves a big question mark about the future development; however, other global events can also change the situation in unpredictable directions.

  • Polyethylene – the material for outer casing experiences an increased global demand and in first half of 2018, the monomer (basis material for polyethylene) price has reached the highest level seen for the last three years. Additionally, increase of crude oil prices is supporting increases in prices of monomer, which has direct impact on polyethylene.  

  • Polyol/isocyanate – in first half of 2018, the prices for the two components for the insulation have shown unexpected patterns and probably some stabilization.

    • Isocyanate – stable global supply combined with a weaker demand has resulted in an unexpected slight reduction of prices. After constant increases from second quarter 2016 to fourth quarter 2017, this trend was broken in first quarter of 2018. Now in second quarter of 2018 the price is around 9% lower than in last quarter of 2017.

    • Polyol - the price usually follows a parallel development relative to the price of isocyanate; however, in first quarter of 2018 this pattern changed and the price of polyol increased. Compared to last quarter of 2017 the price is in second quarter of 2018 around 3% higher.  

In conclusion, for the third quarter of 2018 we do not expect significant changes, why LOGSTOR Price List 02/18 will remain our basis for quotations and orders during this period.