(Corrects to say in the 23rd paragraph, ... "We have been able not only to pass this effect to our customers, but also to increase our margins" .... instead of ... "but also to shrink our margins". New paragraph also inserted immediately after.)
A corrected version follows.
By Stella Dawson, Chief ECB Correspondent
FRANKFURT (Reuters) - Raw materials prices are likely to stabilize in 2006, easing pressure on product prices, chemical industry executives told Reuters, but they warned customers would feel the bite if input costs kept soaring.
Chemicals companies cannot keep absorbing higher raw material charges, especially after crude oil soared 72 percent over the past two years, executives said at a Reuters summit on the chemical industry in Frankfurt.
This would be a blow to the European Central Bank, which has warned companies not to push higher energy costs through the pipeline and spur an inflationary spiral. While the chemicals industry is a largely intermediate producer, executives said they had only so much wiggle room on costs.
Degussa DGXG.DE, the German specialty chemical company, for instance, listed raw material and energy costs as the biggest challenge it faces in 2006. Its energy bill rose 20 percent last year to 1 billion euros, and it responded with a 3-4 percent product price increase in 2005. More may be needed.
"In general, we will not be able to balance that completely with restructuring. We will have to go out and raise prices," Degussa's Chief Executive Utz-Hellmuth Felcht told Reuters.
A $1 rise in a barrel of oil takes 10 million euros off its earnings. Continued...
© Thomson Reuters 2008. All rights reserved.
| Global Environment | Oct 06 - 8, 2008 | Energy |
| Autos II | Sep 30 - Oct 01, 2008 | Hotels/Casinos |
| Restructuring | Sep 22 - 26, 2008 | Financial Services/Exchanges |
| Autos | Sep 15 - 17, 2008 | Autos |
| Russia Investment | Sep 08 - 9, 2008 | Country Summits |
