HIGH POINT – A fast-moving disruption in the global chemical supply chain is triggering sharp increases in foam costs and tightening allocations across the bedding and upholstery categories, setting the stage for higher retail prices and added pressure on an already strained home furnishings market.

Suppliers are implementing double-digit price increases – in some cases exceeding 20% – while limiting order volumes, creating a dual challenge of rising costs and constrained supply that executives say is unlike recent disruptions.

“It’s not just a North America issue; it’s a global problem,” said Michael Faus, senior vice president of Carpenter Co., the industry’s largest foam producer, noting that unlike prior disruptions such as the 2021 Texas freeze, suppliers today cannot simply source materials from other regions. “Back then, you could go outside the U.S. and bring in a spot buy. In this case, Asia, Europe and Mexico are all dealing with the same issues.”

At the center of the disruption is a shortage of propylene oxide, a critical feedstock used to produce polyols, which in turn are essential to polyurethane foam. Faus said a recent fire at a major Texas chemical plant significantly curtailed supply, creating a bottleneck that is rippling across the entire value chain.

Beyond the plant outages, executives point to geopolitical instability – including the ongoing war with Iran and tensions in the Middle East – as a key driver of rising input costs, which also impact textiles, yarn, steel and other components. Because foam chemicals are petroleum derivatives, increases in crude oil and fuel prices are directly impacting the cost of producing key chemicals like propylene oxide, polyols and isocyanates.

The impact is being felt across the entire cost structure, from raw materials to freight to plastic packaging to polyester thread. Rising fuel prices are increasing transportation costs, while higher energy prices are adding pressure at every stage of chemical production, further tightening an already constrained global supply chain.

“You can have all the TDI you need, but about 60% of the chemistry behind polyurethane depends on propylene oxide,” Faus said. “When that gets disrupted, it impacts everything.”

That constraint – combined with outages at major global chemical producers and rising input costs for energy, freight and raw materials such as benzene and natural gas – is driving multiple rounds of price increases. Carpenter implemented increases in early April and is preparing another round for May, which Faus expects to be in the double digits.

“The reality is, pricing is going up, and there’s another increase coming,” he said.

At the same time, supply remains constrained. Carpenter has implemented allocations and is working hard to manage them across its customer base. “We’re trying to keep allocations steady and consistent,” Faus said.

Carpenter isn’t alone in the price hikes or the allocations, limits on historical purchasing levels.

Suppliers have responded with multiple rounds of increases and allocation policies. FXI notified customers via letters received by Furniture Today of an 18% price increase effective mid-April alongside supply reductions, while Future Foam announced – also via emailed letters received by Furniture Today – a 12% increase with another, larger adjustment expected in early May. Vertically integrated 3Z Brands sent a similar notice to foam customers that conventional polyurethane foam would increase 22% and specialty foam products would jump 8% as of April 15.

Effects are being felt

Manufacturing executives across the industry, including a handful who would only speak on background, say the ripple effects are being felt immediately, with foam producers moving quickly to adjust pricing and control supply.

Increases, manufacturers say, are moving through the system at an unprecedented pace. Those constraints are being reinforced by force majeure declarations tied to shortages of key inputs, as chemical suppliers struggle to meet demand following the disruption in propylene oxide production.

The result is a supply chain shock that is cascading downstream – and one that manufacturers say cannot be absorbed.

For mattress and upholstery manufacturers, foam represents one of the largest component costs, leaving little room to offset increases. Several executives said retail prices on mattresses could rise by $100 or more in the near term, with overall product costs climbing meaningfully across categories.

Nick Bates, president and CEO of Spring Air International said his company is already preparing to implement surcharges on orders to manage the volatility. “We’re looking at 12% to 18% increases now, and potentially 30% in May,” he said. “We’ll track it with a surcharge because of how fluid this is. No manufacturer is going to eat that; it’s going to show up at retail.”

At the same time, allocations are limiting manufacturers’ ability to grow production or support new business, creating additional friction at a time when demand remains soft.

While demand has softened compared with the pandemic-era surge – a factor Faus described as a “bit of a silver lining” – he emphasized that the current environment remains highly challenging, particularly as rising costs flow downstream to manufacturers and retailers already contending with weak consumer demand.

“This impacts everybody,” he said. “Most retail is struggling, and even some of the luxury segment is being affected. Now you layer on higher costs, and it puts even more pressure on the finished goods.”

Bob Naboicheck, CEO of Gold Bond, said the increases are coming at a particularly difficult moment for both manufacturers and retailers already contending with higher energy and freight costs.

“It’s a horrible time because the cost of energy is so high and chemicals are so high,” he said. “We’ll have to raise prices – probably around 8% on average – because we just can’t absorb it.”

While many executives view the increases as a necessary response to real cost pressures, others expressed skepticism about how quickly and how broadly pricing is moving higher.

“It feels opportunistic,” Bates said. “Every time something like this happens, prices go up quickly, but I’ve never seen a letter saying they’re coming back down.” He said suppliers are saying once the shortages clear pricing will stabilize.

“I’ll believe it when I see it, and I hope they remain true to their word,” he said.

Past comparisons, future expectations

Not all suppliers are reacting in the same way. Vertically integrated manufacturers with internal foam production capabilities say they are working to manage costs more deliberately.

“I believe the cost pressures are real,” said Kyle Robertson, chief operating officer of Milily USA. “But our goal is to approach any changes thoughtfully. Because we control our foam pouring, we can take a more intentional approach rather than reacting too quickly.”

The current situation has drawn comparisons to past supply shocks, including Hurricane Katrina and the 2021 winter freeze in Texas. But executives say this disruption is more complex because it is global in scope and tied to multiple factors, including geopolitical instability, chemical plant outages and rising energy costs.

“This is about as close as it gets to Katrina, but it’s different,” Faus said. “This is more of a macro challenge.”

Looking ahead, industry leaders expect supply conditions to remain volatile in the near term. If domestic propylene oxide production resumes by early summer, Faus said conditions could begin to ease within 60 to 90 days. However, pricing pressure is expected to linger longer as elevated input costs work their way through the system.

“From a supply standpoint, we’re probably looking at 60 to 90 days of choppy waters,” Faus said. “But from a cost perspective, this will last longer than that.”

"Published by EverChem Specialty Chemicals"