Despite strong demand and rising feedstock prices, resin suppliers bumped up against resistance last month to higher tabs for PE, PP, PVC, and PS. Suppliers responded by piling fresh hikes on top of those not yet implemented. Meanwhile, prices of PET and unsaturated polyesters appear to be rising unchecked.
Polyethylene suppliers issued new price hikes of 3-5¢/lb for March 1. Resin makers split into two camps: Dow, Equistar, ExxonMobil, and Union Carbide posted increases of 5¢/lb across the board. Nova, Phillips, Chevron, and Solvay are seeking 3¢/lb.
Contributing factors: A 4¢/lb PE hike that was pushed back from December to Jan. 1 still had seen minimal implementation in February due to contract agreements. “Only very small customers are paying the increase this month,” said one PE supplier in February. The new increases are expected to solidify the earlier hike this month. Actual implementation of the new increases is not expected until April.
Suppliers say feedstock costs are driving up resin prices. Ethylene contract prices were expected to rise 2-3¢/lb in February, after holding at 26.75¢/lb for two months.
Polypropylene producers aimed to raise prices 3-5¢/lb on March 1. As with PE, there is a split among suppliers: Montell, Union Carbide, Arco, and Aristech are seeking 3¢/lb, while Huntsman and Epsilon want 5¢/lb.
Contributing factors: An earlier hike of 3¢/lb met with little success in January. Suppliers say it is pending, and the March 3¢/lb hike is on top of the 3¢ hanging over from January. PP demand is said to be strong, while propylene feedstock is tight. Monomer is expected to go up 3¢/lb this month.
A 7¢/lb hike on PET bottle resin has been posted for March 1. It appears to be supported by all major suppliers.
Contributing factors: The move is attributed to 12-15% growth in PET demand while supply has tightened. Producers’ operating rates are said be in the 90% range. The only new capacity due this year is 400 million lb from Nan Ya Plastics in Lake City, S.C. Suppliers also say higher feedstock prices have held margins below reinvestment levels.
In mid-February, PVC prices were unchanged from a month earlier. Selling prices rose 2¢/lb in January, but since then the united front among PVC producers crumbled, foiling the other 2¢/lb hike for February. Suppliers say the increase could be delayed unofficially until March.
Contributing factors: Suppliers and processors say demand is still strong. Nonetheless, it appears that some producers have applied price increases selectively. Some suppliers with PVC pipe subsidiaries are rumored to have tried to protect their downstream businesses by not raising prices too high too fast.
The 3¢/lb increases in PS announced for Feb. 1 were followed by 4¢ hikes announced for March 1. In mid-February, Fina reportedly announced a further 3¢/lb increase for April 1. But actual selling prices hadn’t changed in mid-February.
Contributing factors: March typically kicks off the high-demand season for PS. Meanwhile, resin producers are trying to cover soaring costs for styrene monomer. Monomer supply is snug worldwide. Its price rose 2¢/lb in January and appeared headed for a 4¢ increase in February.
Unsaturated polyester resin prices will be going up yet again. AOC raised tabs 2-3¢/lb on Feb. 24. Reichhold’s 3¢/lb increase was for March 1. Cook’s hike is 2¢/lb, effective March 6. Ashland’s increases were 2-5¢, depending on the product, effective Feb. 28. Interplastic raised all its polyesters and vinyl esters by 3-4¢/lb as of Feb. 19. And Dow Plastics hiked its Derakane vinyl esters by 4¢/lb March 1.
AOC has already announced another 3¢/lb increase for March 13 on all its polyesters, vinyl esters, gelcoats, and low-profile additives. Yet another 3¢/lb hike is expected for April 17.
These increases appear to result mainly from rising prices of feedstocks—particularly styrene, which is affected by the rise in crude oil prices. Also, styrene producers worldwide are running at above 100% capacity. There is not enough new capacity coming on stream to meet worldwide demand. “New capacity that was supposed to come on in Europe has taken longer to start up than expected. Thus, some North American capacity has been utilized for exports,” one supplier explains.