By most economic indicators the U.S. economy appears to have stabilized in 2014 to a greater degree than at any time since the onset of the Great Recession. As a result, fears of a return to a recession have abated. For the first time in recent years, macroeconomic factors have substantially given way to matters of supply and demand as key drivers in many industry markets—including those for petrochemical by-products and feedstock, and adhesive raw materials.
Adhesives are compounded products, typically containing more than one raw material. Overall adhesive cost trends do not follow any one individual raw material. Approximately 50% to 80% of a typical adhesive manufacturer’s total costs derive from raw materials. Close to 80% of these materials are petroleum based. The influence of raw materials means developing a comprehensive strategy to manage their costs should be a priority for the adhesive manufacturer.