Iran price shock set to hit products from cleaning to tires

Consumers are set to start feeling the impact of the Iran war beyond filling up their cars, with price jumps on ingredients for everyday cleaning products, tires and animal feed.

Europe’s chemical makers BASF SE and Lanxess AG are among companies raising prices significantly due to shortages and higher expenses for chemical feedstocks. The ingredients go into a broad range of home and industrial detergents, coatings as well as car tires.

Lanxess said it’ll hike prices on inputs for tires by 50% and more, to account for higher energy and raw material costs as well as logistics.


The Middle East conflict has driven up oil and gas prices — key feedstocks for the chemical industry as well as major energy sources. Combined with disruptions to global shipping routes, the war is set to deepen challenges for an already struggling sector, Germany’s chemical industry association VCI and union IGBCE warned last week.
Evonik Industries AG, a chemical company making more than 9,000 products, said it’s seeking to pass on price increases. For methionine, used in animal nutrition, the firm raised prices by 10% this month, before declaring force majeure on one of its plants in Singapore.

The increases are likely to find their way to breeders of chickens and cows globally.

“Other chemical companies in Europe will also increase their prices,” said Philip Geurts, chemicals associate at BloombergNEF. “Asia is on the verge of a severe supply shortage that hasn’t fully materialized yet, as earlier shipments are only now running out about 18 days into the war.”

The impact has been more immediate in Asia, where chemical plants depend heavily on base ingredients from the Middle East. Disruptions are now starting to reach Europe as well.

Production at Agrofert’s ammonia plants has been reduced to a technical minimum of 85% across Europe, affecting major fertilizer producers in countries such as Germany and Slovakia.

Apart from chemical makers, other producers like Heidelberg Materials AG plan to lift prices to mitigate surging costs.

“On the transport side we do see some cost inflation — that’s why we also need to warn our customers that prices are going to rise,” Chief Executive Officer Dominik von Achten said in an interview with Bloomberg Television.

The German building materials maker of cement and other products will add temporary surcharges, for now, rather than general prices increases.

“If this goes on for longer, you know, things mount up,” von Achten said. “We have learned from the crisis of the past and need to act fast.”