Kraton Raises Pine Chemical Prices Up to 25 Percent as Feedstock Squeeze Hits Adhesives and Tires

Kraton Corporation, the world largest producer of pine-based specialty chemicals, announced on 26 May 2026 a global price increase of up to 25 percent on crude tall oil (CTO) derived products and turpentine-based resins. The decision affects the company entire portfolio of bio-based performance chemicals manufactured from pine wood pulping co-products, and it lands on customers across adhesives, tires, road construction, coatings, inks, and fuel additives markets.

This move is not isolated. It is the third escalation in barely three months. On 24 February 2026 Kraton lifted prices by 10 to 20 percent across its CTO refinery and derivatives range. On 16 March 2026 the company applied a separate increase covering all polymer products. The latest 25 percent adjustment, announced from the Houston headquarters, marks the steepest step in this sequence and confirms a sustained upward trend rather than a one-off correction. Each successive announcement has widened both the scope of affected products and the size of the increase, signalling persistent pressure on the underlying feedstock chain.

Crude tall oil is the raw material at the heart of this issue. It is a thick byproduct recovered during the kraft pulping of pine wood, the same process used to make paper. Once collected, CTO is distilled and separated into several valuable fractions. Tall oil fatty acids, tall oil rosin, and distilled tall oil each feed into different industries. Turpentine, another co-product of pine processing, is refined into terpene resins. Because all of these materials originate from pulp mills, their availability is tied directly to paper production volumes, and global pulp output has been shrinking as paper mills close. Less pulping means less crude tall oil, and a tighter feedstock pool pushes prices higher for everyone downstream.

The products built on this chemistry are largely invisible to consumers but sit inside everyday goods. Tall oil rosin and turpentine-based resins act as tackifiers, the sticky ingredients that give adhesives and tapes their grip. They are used in pressure-sensitive labels, packaging tape, hot-melt adhesives, and hygiene products such as diapers. In the tire industry, these resins improve traction and durability of rubber compounds. Tall oil fatty acids serve as building blocks for alkyd resins used in paints and coatings, for lubricants, for metalworking fluids, and for oilfield and mining chemicals. Pine-derived chemistry also reaches into road marking paints, printing inks, and fuel additives. A price rise at this level of the supply chain therefore ripples outward into a broad set of manufactured products.

The sectors most exposed to the increase are adhesives manufacturers and tire producers, two markets where pine chemicals make up a meaningful share of formulation cost. Coatings and ink producers face higher input bills as well. Many of these buyers operate on thin margins and have limited ability to switch suppliers quickly, because Kraton is the dominant global player in pine chemicals with refineries in the United States and Europe. Producers who cannot absorb the higher cost are likely to pass at least part of it through to their own customers, which can feed into the prices of packaging, consumer goods, and automotive components over the coming months.

Kraton describes the increase as global, meaning it applies across its operations in more than 70 countries. The largest CTO refining capacity sits at the Panama City facility in Florida, the company main pine chemical site and the location of its biggest single capital investment in decades. With the new pricing taking effect in the second half of 2026, downstream manufacturers now face a third consecutive cost step in a single year and a feedstock market that shows no clear sign of loosening. Buyers are expected to respond by renegotiating contracts, seeking partial substitution with petroleum-based alternatives where technically possible, and securing supply commitments earlier in their planning cycles.