Pricing Update - April 2000

Resins Prices Keep Pushing Upward

For the moment, there seems to be no stopping the upward march of PE, PP, PVC, and PS prices. New increases for most of them are officially scheduled for this month, and May 1 dates have been set for PS hikes. Furthermore, PET prices moved up 7¢/lb, and price increases are pending on UHMW-PE, engineering resins, and unsaturated polyesters.

 

PE prices move up again

Polyethylene resin tabs moved up 4¢/lb last month, as the first price hike of the year finally took hold. A second hike, of 3¢/lb, is likely to be implemented this month. Meanwhile, a third increase has emerged. It appears to be led by Dow Plastics, which called for 5¢/lb across the board, effective April 1. It will not likely be felt until May or June.

Contributing factors: The hikes are attributed to escalating monomer prices. February ethylene contract prices moved up 3¢/lb. Monomer inventories are reportedly tight, and PE resin demand remains strong.

 

New PP price hike

At press time, it was too early to tell if the 3-5¢/lb PP price hikes scheduled for March 1 had been implemented. Meanwhile, the year's third PP price hike is already in the works. Montell announced a 3¢/lb hike for April 1, and other major players took similar actions. The new increase is not likely to be felt until May.

Contributing factors: Suppliers say they succeeded in implementing about 1-1.5¢ of the year's first increase (3¢/lb), particularly in copolymers. That hike was attributed to strong resin demand and suppliers' need to improve poor profit margins. However, the subsequent two hikes were a direct reaction to monomer price pressure.

 

PET prices are up

A price hike of 7¢/lb was pretty well in place last month. Implementation will be completed this month for buyers with 30-day price-protection agreements.

Contributing factors: This move is attributed to feedstock costs, as well as supply/demand fundamentals. PET demand is expected to grow 12-15% this year. Also, we are in a traditionally strong demand period for PET. Other than the 400-million-lb/yr plant being built by Nan Ya Plastics in Lake City, N.C., no major new capacity is expected this year.

 

New PVC and PS hikes

PVC homopolymer went up 1-2¢/lb in March, as 2¢ hikes originally slated for Feb. 1 finally kicked in. The new price level is expected to hold through April. Formosa and Westlake announced further 2¢ hikes for April 1, but they will probably have little effect before May. PVC compounders reportedly are having trouble passing through more than half of the latest increase.

In PS, Dow and Nova announced 4¢ increases for May 1. Contributing factors: The refrain is the same as elsewhere: Monomer costs are up, and market demand is strong.

 

UHMW-PE prices thaw

Higher prices for UHMW-PE have been announced by Montell and Ticona. Montell called for a 10¢/lb increase as of April 1. Ticona announced a 20% hike.

Contributing factors: This is the first price increase for these resins in five years. The move is attributed to price erosion, rising costs of feedstocks, and other inflationary pressures.

 

Engineering resins go up

GE and Dow announced price increases for March 20 and 31, respectively. Dow raised SAN and ABS by 7¢/lb and PC and PC/ABS by 8¢/lb. GE hiked tabs 8¢ for ABS, ASA, PC, PC/ABS, and PC/PBT; 7¢ for PPO/nylon (Noryl GTX); and 6¢ for PBT. Bayer had taken no action at press time. BASF was unavailable for comment.

Contributing factors: Rising feedstock costs are blamed. Styrene supplies are tight globally and are expected to remain so. Also, Bayer sources note that global PC capacity is very tight and will probably remain so through 2004.

 

Unsaturated polyester rises

Unsaturated polyester is poised for yet another price increase. Reichhold led off with a 4¢/lb hike on all its polyesters for April 1. This follows a 3¢ increase planned for March 1. Cook Composites & Polymers planned to raise prices 2¢/lb on April 6 after raising tabs 2¢ in March. Cook sources anticipate another increase in May. Other producers had no comment.

Contributing factors: Again, the culprit is rising costs of raw materials, especially styrene monomer, which is tight worldwide. Eastman added fuel to the fire by boosting prices of its NPG glycol, used in premium resins, by 5¢/lb April 1.