Ripples - May 29
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Dow Chemical hikes prices 20 percent, citing energy
Matt Daily, Reuters
Dow Chemical Co, the biggest U.S. chemical manufacturer, said on Wednesday it would hike prices for all its products by up to 20 percent next month, the latest signal that escalating energy prices were stoking inflation.
Citing a sharp rise in the costs of energy, raw materials and transportation, Dow will raise prices globally on its broad slate of products that range from plastics and films to paints and agricultural supplies from June 1.
Dow's move came as little surprise to industry watchers, since prices for natural gas, a key feedstock for the chemical industry, have jumped by 56 percent since the end of 2007, and crude oil prices have rallied 32 percent to more than $125 per barrel.
(28 May 2008)
Related from AP: Dow: Country in "true energy crisis"; ups prices.
Will Soaring Transport Costs Reverse Globalization? (PDF)
Jeff Rubin and Benjamin Tal, CIBC World Markets
Globalization is reversible. Higher energy prices are impacting transport costs at an unprecedented rate. So much so, that the cost of moving goods, not the cost of tariffs, is the largest barrier to global trade today. In fact, in tariff-equivalent terms, the explosion in global transport costs has effectively offset all the trade liberalization efforts of the last three decades. Not only does this suggest a major slowdown in the growth of world trade, but also a fundamental realignment in trade patterns.
...In a world of triple-digit oil prices, distance costs money. And while trade liberalization and technology may have flattened the world, rising transport prices will once again make it rounder.
(27 May 2008)
From CIBC World Markets (pages 4-7). Suggested by Dr. Larry Hughes.
Dallas area residents feel the grip of soaring gas prices
Scott Farwell and Michael E. Young, Dallas Morning News
With a gallon of gasoline hovering at the $4 mark, it's the numbers that sketch the impact of rising fuel costs.
But the real-world struggles of everyday folks show how deeply those soaring prices affect individual lives.
Commuters caught between a home here and a job there calculate the cost of changing one or the other and realize that neither provides an answer.
... across the teeming plains of North Texas, a place that came of age in the era of the automobile, many find themselves trapped behind the wheel.
Donna Byers burns 10 gallons of gasoline a day commuting from her home near Lake Whitney to her job in north Carrollton.
"That's 110 miles each way, and $37 to $40 a day for gas," Ms. Byers said.
"I'll tell you, it's really kicking my butt."
(29 May 2008)