Energy Disruptions Begin to Hit Coatings Supply Chain
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Middle East tensions are beginning to affect energy markets, petrochemical feedstocks and global freight flows, all critical to the coatings industry.
LANXESS cited higher energy and raw material costs in raising prices for key intermediates, while BASF pointed to continued increases in raw materials, energy and logistics in its acrylic monomers adjustments. Songwon also referenced rising raw material and freight costs in its latest increases. Notably, WACKER directly linked its pricing actions to ongoing developments in the Middle East, stating that disruptions to energy and raw materials markets are driving higher oil, natural gas and logistics costs. Together, these announcements, as reported by PCI, point to a broader pattern of cost escalation, even where the underlying drivers are not always explicitly tied to a single event.
The risk centers on the Strait of Hormuz, a key transit route for global energy flows. According to the U.S. Energy Information Administration (EIA), more than 20% of global petroleum liquids and over 20% of global liquefied natural gas (LNG) trade pass through the corridor, much of it exported from Qatar. RIranian strikes on Qatar’s LNG infrastructure have disrupted a significant portion of the country’s export capacity, tightening global gas supply and driving price volatility, Reuters reports. Natural gas and LNG-derived feedstocks are central to petrochemical and polymer production, meaning disruptions can impact resins, intermediates and additives.
PCI will continue to track developments pertaining to the coatings industry.
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