Home » Industrial Gas Distributors Fight Rising Costs with Price Increases
Industrial Gas Distributors Fight Rising Costs with Price Increases
June 30, 2006
Both Praxair Distribution Inc. and Airgas Inc have announced price increases recently in response to the rising cost of fuel and energy as well as basic materials such as steel, aluminum and brass. "The cost of fuel and energy has escalated beyond what we can absorb," said Praxair Distribution President Wayne Yakich. "This, along with the increasing cost of such basic materials as steel, aluminum and brass heavily impacts our packaged gases, equipment and consumables businesses. The continuing cost increases from our suppliers have made these price increases necessary for us to continue to reliably service our customers, and deliver the quality products and services customers expect to receive." Airgas has seen higher prices for cylinders, bulk tanks, equipment, and welding consumables, due to higher stainless steel and non-ferrous metal prices, which all factored into the pricing actions. Praxair, Danbury, CT, a subsidiary of Praxair, Inc., announced price increases for its industrial gas customers in the U.S. and Canada, effective July 1, where permitted by the terms and conditions of existing customer contracts: 8% increase for industrial oxygen, nitrogen and argon; 5% increase for industrial carbon dioxide; 10% for industrial hydrogen; and 3-5% for equipment and associated consumables. In addition, rental fees, facility fees and regional charges for recovery of premium energy costs will also be increased.
Airgas price increases that became effective June 26, 2006, included:
10-15% for packaged and bulk industrial gases, including oxygen and nitrogen; specialty gases; medical gases; nitrous oxide; carbon dioxide; and dry ice 15-20% for argon, hydrogen, helium, acetylene and other fuel gases Airgas also will raise rental rates for cylinders and bulk tanks and other service charges and will continue to pass along higher pricing for hardgoods and safety products. These changes are in addition to ongoing fuel and other surcharges implemented to recover specific costs.
Praxair is an industrial gases company in North and South America, with 2005 sales of $7.7 billion. The company produces, sells and distributes atmospheric, process and specialty gases, and high-performance surface coatings. Praxair products, services and technologies bring productivity and environmental benefits to a wide variety of industries, including aerospace, chemicals, food and beverage, electronics, energy, healthcare, manufacturing, metals and others.
Airgas, Inc., through its subsidiaries, is a U.S. distributor of industrial, medical, and specialty gases, and related hardgoods, such as welding equipment and supplies. Airgas is also a distributor of safety products, a producer of nitrous oxide and dry ice, a liquid carbon dioxide producer in the Southeast, and a distributor of process chemicals, refrigerants and ammonia products. Its 10,000 employees work in about 900 locations including branches, retail stores, gas fill plants, specialty gas labs, production facilities and distribution centers. Airgas also distributes its products and services through eBusiness, catalog and telesales channels.