New announcement cites increase of up to 9% on select products beginning Nov. 4
As costs associated with production and transportation of base oils and lubricants continue to climb, additive manufacturers have now announced an increase of up to 9% on select products beginning Nov. 4, 2021. It’s important to note that when crude oil or additives increase, price increases on finished lubricants are typically not far behind. According to Shell, “we are continuing to see the market evolve in recent weeks with price increases for base oils, freight and grease thickeners. These increases in raw materials used to manufacture our products are taking a heavy toll on the costs of production.” “This latest round of price increases does not come as a surprise,” said SCL General Manager Travis Becktel. “Based on the supply chain crisis and historical backlog we’re seeing at U.S. ports, OPEC’s decision to stay at current predetermined production levels and hurricane-related closures in the Gulf in September and early October, a lot of businesses either have or should have been bracing for this. That doesn’t mean it’s welcome, but price increase announcements have become more and more expected as of late.” While some analysts say that hikes can be a forerunner of recovery, the latest round of increases are much more likely to be indicative of the contrary. A short-term energy outlook by the U.S. Energy Information Administration:Hurricane-related disruptions, including refinery shutdowns and brief closures of Colonial Pipeline Line 2, contributed to reduced production and higher inventory withdrawals. Also, increases in the American Trucking Associations’ Truck Tonnage Index and the Cass Freight Index suggest trucking demand remains high as supply chains continue to navigate a backlog of shipping orders. Rapidly rising shipping activity will likely contribute to high distillate demand.Â
With no end to the supply chain crisis in sight and uncertain forecasts surrounding winter demand, “if our customers have not searched for ways they can lower their per unit price or implement cost-saving strategies across the board already, now is the time to do it,” Becktel said. “We talk about the savings that buying in bulk, instituting a preventive maintenance schedule, oil analysis and investing in premium products can bring forward all the time because those practices work. We’ve seen it lead to double-digit savings in customers across a wide range of industry sectors. We encourage everyone to look into those strategies moving forward as we continue to help our customers weather this storm.”Current Price Increase announcements:
- Shell Greases Price Increase Announcement - 11/8/2021
- Houghton Price Increase Announcement - 11/4/2021
- Houghton Fire Resistant Hydraulic Fluid Increase Announcement - 10/11/2021