Dow Announces North American MDI, TDI And Polyol Price Increases

Midland, MI - Effective June 1, 2006, Dow will increase its prices in the United States and Canada for the following polyurethane products:

• VORANATE toluene diisocyanate (TDI) by U.S. $0.05/pound.
• VORANOL, VORALUX and SPECFLEX polyether and copolymer polyols by U.S. $0.05/pound.
• Methylene diphenyl diisocyanate (MDI) by U.S. $0.05/pound.

"Dow Polyurethanes continues to face high and volatile energy and raw material costs. Crude oil prices are currently at an all-time high of over U.S. $75 a barrel – roughly 58 percent higher than last year at this time, and industry analysts predict this upward trend will continue through 2006," stated Pat Dawson, Dow business vice president, Polyurethanes and Thermoset Systems. "In addition, although the mild winter has driven down natural gas prices from their November 2005 high of U.S. $15/MM Btu, current pricing – at around U.S. $8/MM Btu – is still triple historic levels and is continuing to impact our costs."

"High gasoline prices are also increasing the cost of key precursor materials such as propylene, benzene, and toluene, which are valued as replacements for MTBE (methyl tertiary-butyl ether) – a chemical compound almost exclusively used as a fuel additive in gasoline," continued Dawson. The EPA recently mandated that all states switch from using MTBE to alternate additives.

"For The Dow Chemical Company, our feedstock and energy costs in 1Q 2006 were more than U.S. $800 million higher than in 1Q 2005," Dawson added. "While we continue to take steps to reduce our operating expenses, increase productivity, and improve organizational efficiencies, the continued volatility in feedstock and energy costs has made this price increase for Dow Polyurethanes necessary."

SOURCE: Dow Chemical Company