Are you paying more for diapers? Condemn the freeze in Texas.
The February storm, which closed chemical plants across Texas and disrupted production of goods from auto parts to smartphones, continues to reverberate throughout the global supply chain.
One of the missing products is acrylic acid, a propylene-based compound that absorbs diapers. Executives and industry consultants say that despite declining demand, shortages are still a factor in rising diaper prices.
The acrylic acid supplier “has just been hit,” said De Sales Trading Company Inc, which sells and sells so-called highly absorbent resins made from acrylic acid with two brothers. Said Michael Murray, who runs the company. “Currently, the supply is very tight.”
The global supply chain is in great turmoil, disrupted by pandemics and weather-related production disruptions, fluctuations in demand, and rising raw material costs. Diapers are one of many consumer products that are becoming more expensive.
According to Kimberly-Clark market research firm IRI, US diaper prices have risen 9% from a year ago. Co., Ltd.
And Procter & Gamble Co., Ltd.
, Two of the largest diaper makers, warnings are increasing further.
Mike Hsu, CEO of Kimberly-Clark, the maker of Huggies, said:
Sue said he had no shortage of diapers and wasn’t expecting it, but said the company was forced to more carefully manage its allocations to retailers.
“We strive to be as productive as possible and do everything we can to manage our supply fairly,” he said.
A year ago, acrylic acid was in excess and prices were stagnant. Asian producers were sending supply to the United States due to inadequate domestic demand. The declining birthrate during the pandemic meant that diaper sales would decline further.
The equation began to change last year when Covid-19-related supply chain disruptions, from port delays to shortages of shipping containers, delayed delivery times and increased shipping costs.
A Texas storm then cut off electricity throughout the state, shutting down the world’s largest petrochemical business, which produces most of the US-made acrylic acid.
Many of the storm-stricken chemical plants have resumed production, but the process of returning online has taken weeks and continues to plague pipe and equipment problems damaged by the storm. Many suppliers have enacted force majeure, also known as the “Force Majeure” clause. It is intended to protect you in the event that an event outside your control prevents you from fulfilling your contractual obligations.
Acrylic acid supply is improving, but replenishment can take months, some suppliers said.
Acrylic acid is made from propylene and is used to create a polymer that can absorb 10 times its weight in water. Diapers are the largest users of highly absorbent resins that are also used in adult underwear, women’s care products, dog training pads and industrial cleaners.
BASFSE and Evonik Industries, two of P & G and Kimberly-Clark’s largest suppliers AG
, Closely related to Texas.Evonikof
The highly absorbent resin plant is located in Louisiana, but relies on a Texas-based supplier. Vertically integrated BASF has a highly absorbent resin business in Texas.
Unfortunately, DeSales Trading Company’s Murray pushed to clear inventory by March 31st, the end of the company’s fiscal year, but the price doubled in the first week of April. It was.
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Kimberly-Clark announced in March that rising material costs would raise prices for several products, including diapers. Procter & Gamble said prices for diapers, adult incontinence and women’s care products that are all dependent on acrylic acid are rising.
According to IRI, baby care products such as diapers, wipes and toys are not in short supply, but they are increasingly out of stock at retail stores in the United States. According to IRI, the average number of baby care products in stores for the week ending April 25 was 10%, up from 8% last month.
P & G executives say they don’t think sales will be hit hard by rising prices.
Shoppers are still buying diapers and haven’t moved to cheaper store brands to save money, according to grocery store executives.
B & R Stores Inc, Nebraska. “Our diaper business is relatively consistent,” said Mark Griffin, president of the company, adding that price increases are so small that consumers will not notice.
Karen Clear, in Levittown, Pennsylvania, noticed that the oversized pull-on worn by her 6-year-old son was becoming more expensive and increasingly restricted. Clear said he started paying about $ 9 for a 9-count pack around last month. This used to be $ 8 and lasts for a few days. She said she couldn’t find a cheaper, larger pack for each diaper.
“We have to check every store almost every day to see if we can find it,” she says, as women’s care products and adult incontinence products, like many women, are on the rise. He added that he was hit double. Adult incontinence is more common in women than in men, according to medical researchers. “It’s sad, and it’s getting very expensive,” she said.
— Jaewon Kang contributed to this article.
Write to Sharon Terlep (email@example.com)
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Diaper prices are still getting bumps from the Texas freeze
Source link Diaper prices are still getting bumps from the Texas freeze