Stocks of hand sanitiser ingredient run low in Europe
A vital ingredient for hand gels and alcohol wipes is in short supply in Europe, with prices for the chemical jumping sharply on the back of a surge in demand because of the coronavirus pandemic.
Stocks of isopropyl alcohol are running low, according to several suppliers and buyers on the continent, leading to worries that everyday products important in preventing the spread of Covid-19 will become more expensive and scarce.
Healthcare systems, businesses and consumers are already struggling to procure sanitisers in the face of panic buying. Prices have spiked and many stores have begun rationing after the World Health Organization and other public bodies advised people regularly to wash their hands with alcohol-based hand rubs or soap and water to combat the viral outbreak. France has imposed price caps on hydroalcoholic gels.
We're told we probably aren't going to get any more until the middle of April - that's the best case
Stephen McConnell, partner at MB Fibreglass
One of the main disinfectants found in sanitisers, isopropyl alcohol, also known as isopropanol or IPA, is selling at historic highs in Europe, according to ICIS, the market information service. Its data show IPA grades for the cosmetics and pharmaceutical industries more than doubled to €2,250 a tonne in just two weeks. "It's unprecedented," said Anne-Sophie Briant-Vaghela at ICIS.
In the UK, which has no facilities to manufacture IPA, many independent distributors are sold out. One company, Excalibur Hygiene, said it was no longer accepting phone calls "due to the unprecedented global demand in the light of the coronavirus crisis".
"There's now virtually none available at all in the UK, we've been told," said Stephen McConnell, partner at MB Fibreglass, a chemical distributor in County Antrim. "We're told we probably aren't going to get any more until the middle of April - that's the best case."
Heightened demand for the chemical has coincided with restricted supply caused by production issues, according to industry figures, though they did not specify what. Other applications of IPA include tool cleaning, fuel additives, solvents and in electronics.
"I've been in this business for over 15 years but I've never seen it like this," said Steven Willekes, managing director at DutCH2, a Netherlands-based chemicals distributor. "Normally there's some regular [IPA] product coming in via imports - but that hasn't come.
"The few producing companies in Europe weren't able to cope with all the high demand, so they're already sold out for the month of March."Sign up here
Big suppliers to the European IPA market include Royal Dutch Shell. It declined to comment. Another, ExxonMobil of the US, had a fire at its Louisiana refinery earlier this year, but said there was no impact on production and that it was meeting all contractual commitments and customer needs.
Ineos said it was running its two IPA plants in Germany "flat out" and was "looking to push additional production" to address the shortage.
The dearth of a chemical hitherto overlooked by many consumers shows how global supply chains are coming under strain from the impact of coronavirus.
Prices have also risen for ethanol, another disinfectant common in hand gels. DCS, a maker of sanitiser based in Oxfordshire, said it was manufacturing "24/7" and that costs of the raw material had gone up by more than half in three weeks.
"Whilst we have to pass this on, we have no interest in taking advantage of what is a very serious situation," said chief executive Michael Lorimer. "We have not increased our margin but sadly others are doing so."
Market researchers Kantar found that UK sales of hand sanitiser were up 255 per cent by value in February from a year earlier, while sales of other liquid soaps have risen 8 per cent and household cleaners 10 per cent.
Average prices for single units of liquid soap sold to consumers, including hand sanitiser and gel, have risen 58.4 per cent in China, where the outbreak began and demand pushed up prices, and 35.6 per cent in South Korea, another country that has also suffered a huge outbreak, according to Euromonitor International.
Both heightened demand and higher chemical costs are pushing up prices elsewhere, according to market players, though large manufacturers have said they will not pass any cost increases on to consumers.
The UK's Reckitt Benckiser, one of the world's largest consumer goods groups, said it had not increased its prices to retailers for hand sanitisers and similar products, nor had it changed recommended retail prices.