PE gets another hike
By the end of March, polyethylene prices had moved up 11¢/lb since the start of the year. The last steps in that process were the implementation of a 5¢/lb increase and a 6¢ energy surcharge. That surcharge was due to be lifted on April 1, but suppliers replaced it with a 6¢/lb increase on March 15. Another increase of 5¢/lb was also planned for April 15.
Meanwhile, DuPont announced in early March that it would raise prices of several ethylene copolymers and LDPEs, effective immediately or as contracts allow. A 6¢/lb hike was posted on Bynel, Appeel, Elvax, and Selar copolymers and LDPE. A temporary increase of 10¢/lb was applied to Surlyn, Conpol, Transcend, Fusabond, and DuPont 20 Series resins. Nucrel acid copolymers got a temporary 6¢ hike.
Contributing factors: Suppliers used the energy surcharge as an attempt to catch up with soaring feedstock costs. They also limited buyers with 60-day price protection to only 30 days. From now on, suppliers apparently want to issue 30-day notice of price hikes and eliminate price protection altogether.
PE resin supply has grown tighter, particularly for LLDPE film grades, for which inventory levels are down to 30 days. Inventories for LDPE and HDPE are reportedly over 45 days.
PP prices strong
Polypropylene prices remain firm, following the implementation of a total of 6¢ to 8¢/lb in the first quarter. An additional 5¢/lb price hike nominally was effective April 1. In addition, Solvay Engineered Polymers announced May 1 increases on TPOs of 4¢/lb in truckloads and 7¢ for ltl shipments.
Contributing factors: Higher propylene monomer costs, tight resin supply, and good demand could serve to bolster suppliers’ effort to raise PP resin tabs further. Basell, for example, sent out a letter in late March advising its customers that as of April 1, total increases of 13¢/lb since January would be fully implemented.
Suppliers’ margins remain tight as propylene monomer prices move up and PP resin hikes take longer to implement due to price protection. Polymer-grade propylene was up 8¢/lb from January through March to a contract-price level of 27.5¢/lb, while spot prices were at 30¢ to 31.5¢/lb. Monomer increases of 2¢ to 3¢/lb have been proposed for April.
Meanwhile, PP resin supply has tightened and is expected to remain snug for the next two years, despite the start-up in March of the 775-million-lb/yr ConocoPhillips plant in Linden, N.J.
PVC going up again
PVC producers have supported 2¢ monthly increases in January, February, March, and April. At press time in mid-April, Formosa had announced the same for May 1. (Formosa also hiked dispersion resins 3¢/lb in March.)
Producers of PVC compounds haven’t been able to raise prices as far or as fast. Compounders tried a 3¢/lb increase for Feb. 15, but PolyOne delayed its increase to April 1, forcing most others to do likewise. PolyOne has since called for a 5¢/lb hike on May 1.
Contributing factors: VCM supplies tightened as monomer suppliers slashed production during the sudden energy-cost spike of late February and early March. Chor-alkali producers are also trying to raise the price of chlorine, which makes up 60% of the weight of PVC. Anticipating further monomer hikes, resin producers are trying to get whatever increases they can during the spring construction season when demand is usually highest. This year, however, PVC demand is spotty and siding sales appear to be slower than in 2002.
Mayhem in PS prices
After starting the year with two 3¢ hikes in January and February, followed by two 4¢ increases in March and April, three of the largest polystyrene producers created havoc for their larger customers by adding a sudden 4¢ increase for March 1 without any price protection. It comes on top of the previously announced 4¢ increase that did carry price protection. BASF and Dow called their surprise hikes an “energy and raw-material surcharge.” While Nova and BASF imposed these surcharges on March 1, Dow gave its customers until March 10. The 4¢ surcharges remained in place for April. One of the three suppliers believes the surcharge will come off in May.
Customers got a bit softer treatment from two PS producers that are integrated with oil companies. Chevron imposed only a 2¢ TVA on top of the previously announced 4¢ hike. Fina added another 4¢ to its announced 4¢ for March 1 but retained price protection.
Contributing factors: The brief oil-price spike and continued high benzene prices drove suppliers to impose the 4¢ surcharge. Because market demand is strong during the spring high season, PS buyers must swallow their distress about having their contracts pushed aside.
Engineering resins go up
DuPont and Rhodia joined BASF in nylon price hikes. DuPont’s increase of 10% became effective April 15. Rhodia sources say they’ll raise prices 7¢/lb this spring.
DuPont followed the lead of BASF and Ticona by raising acetal tabs 10% April 15.
In addition, DuPont added 10% to prices of Rynite PET and Crastin PBT on April 15. BASF, Ticona, and GE had already hiked PBTs, generally by 9¢/lb.
Thermoplastic polyurethanes (TPUs) from BASF and Noveon also went up 5¢ on April 15. Bayer will boost prices of its TPUs and TPU alloys by an undisclosed amount on May 1. TPU prices have not generally increased since the fall of 2000. Dow has not yet issued a price increase on TPUs, and Huntsman could not be reached for comment.
Eastman hiked its specialty polyesters and copolyesters by another 7¢/lb on May 1. Eastman last raised prices on its Dura Star, Provista, Eastar, Ecdel, Eastalloy, Spectar, Eastapak, and Eastman products on March 1.
In addition, Eastman raised tabs of Tenite cellulose acetate by 7¢/lb on May 1.
|Market Prices Effective Mid-Apr A|
KEY: Colored areas indicate pricing activity. An arrow () indicates direction of price change. aTruckload, unless otherwise specified. bUnfilled, natural color, unless otherwise specified. cBased on typical or average density. dNot applicable. eNovolac and anhydride grades for coils, bushings, transformers. fNovolac and anhydride grades for resisitors, capacitors, diodes. gIn quantities of 20,000 lb. h19,800-lb load.