Iran war drives BASF and Ashland to increase prices
Key takeaways
- BASF is raising product prices in various categories by up to 30% due to rising raw material, logistics, and energy costs.
- Ashland is adopting flexible pricing strategies across multiple product portfolios to address market volatility and regional challenges.
- Both companies are adjusting pricing actions in response to geopolitical instability and supply chain disruptions in the SWANA region.
Major ingredient suppliers are reacting to the Iran war by adapting their pricing across their portfolios. Intensifying unrest in the SWANA (South West Asia and North Africa) region is causing adverse knock-on effects on supply chain integrity, volatility in pricing, and precarious raw material availability.
In response, BASF is raising product costs by up to 30% on all products across its Home Care, Industrial and Institutional Cleaning, and Industrial Formulators portfolio in Europe. Meanwhile, Ashland is implementing various new pricing strategies across products and regions.
BASF’s price hike is effective immediately or, as terms of existing contracts allow. The German chemical producer says that its decision to increase product prices was caused by rising costs in raw materials, transcontinental logistics, and packaging and energy, caused by ongoing political instability.
Simultaneously, global additives and specialty ingredients company Ashland is adapting to the market pressures of the Iran war by adopting pricing actions in various pain points throughout its Life Sciences, Intermediates, Personal Care, and Specialty Additives product portfolios globally.
The war between Iran and Israel, backed by the US, is leading to a strain on the availability of raw materials for the personal care sector. Following offensive US/Israeli bombing, Iran’s retaliatory blockade of the Strait of Hormuz has caused oil prices to skyrocket and bottlenecked European access to ammonia and phosphate, helium and sulfur. These critical raw materials have various cosmetic and home care applications.
Ashland cites volatility in energy, raw material pricing, and logistical issues spurred on by the conflict in the SWANA region as the source of its decision.
The company is taking a flexible approach and adapting its pricing actions across procurement, supply chain, and operations in order to contain costs. The company also aims to adjust pricing to maintain a sustainable supply to customers.
Ashland’s pricing actions will vary across products and regions to remain flexible according to local market dynamics, contracts, and customer needs. The company says that it will closely monitor developments in market conditions and adjust accordingly as market dynamics continue to evolve.
