Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Jeff Zekauskas - J.P. Morgan.
Jeff Zekauskas - J.P. Morgan
You talked about raw materials stepping up in the fourth quarter and being roughly 16% to 18% for the year, which is consistent with what you had in the third quarter. Can you remind me how much raw materials were up in the first half or what does that imply for your estimate of raw material cost inflation in the fourth quarter?
Michele Volpi
Well, right now - and the situation, Jeff, is very fluid, as you know, starting from oil but then going to all the by products - we expect the dynamic in the fourth quarter to go to a lower stress level, let's put it, as it compares to Q3. That means that we don't expect too much inflation.
Clearly, in the first half of the year, we had mid to single digits and you've seen the spike in the third quarter. Now clearly, June 24th on our call, we expected 13% to 15% for the year. Clearly, after that, what has happened, we have moved that to 16% to 18%. Clearly, the third quarter is what we have seen being the worst so far, coupled also with a lot of raw material availability issues.
Jeff Zekauskas - J.P. Morgan
So if I understand what you said to me, Michele, you expect raw materials - and this is my recollection from the previous conference call - you expect raw materials to be up, I don't know, 22% or 25% in the fourth quarter. Is that right?
Michele Volpi
On a year-over-year basis, we are somehow in that number, yes.
Jeff Zekauskas - J.P. Morgan
My second question is: When you look at your pricing, I know you have such good accounting systems, and say you looked at it by month. In the previous quarter, I think your prices were up something like 0.9% or 0.8%. And this time you were up, you know, way over 2% or 2.6%. So in the last month of the quarter, how much were your prices up or as you go into the new fourth quarter, how much are your average prices up?
Michele Volpi
Well, consistent with the wording we have used, we are continuously accelerating. So you can expect that towards the end of the quarter is higher than the average. I would say that the biggest impact of price increases is expected in the fourth quarter. That's the main acceleration that we have planned for, taking into account, Jeff, that we are working in a very collaborative manner with our customers to make sure that our long-term growth plans are not undermined. So we are recovering our margins in the fourth quarter, but we are doing that as judiciously as we can.
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