A surge in gasoline prices has caused a shortage of chemicals that are also used to produce goods like car parts and pharmaceutical products, placing further pressure on costs for manufacturing essential items.
This year’s rise in oil prices has already increased the costs for so-called petrochemical feedstocks, which are produced from a derivative of crude. But a strong appetite for the chemicals among makers of gasoline has intensified the competition for these key building block materials.
Benzene, derivatives of which are used to make rubber, nylon and pharmaceutical products, surged to a record-high of $1,900 per tonne in Rotterdam last month, before easing off to $1,780 at the start of July, according to ICIS, a commodity data firm. Other chemicals such as toluene and xylene, which are used in plastic packaging and textiles, have also spiked to the highest since records began in the 1980s in recent weeks.