The fourth quarter saw a significant drop in prices of commodity thermoplastics such as polyolefins and PET, which largely negated the price increases of the second and third quarters.

The fourth quarter saw a significant drop in prices of commodity thermoplastics such as polyolefins and PET, which largely negated the price increases of the second and third quarters. Lower energy and feedstock prices were one reason for soft resin prices. Others included somewhat lackluster domestic demand, which led many processors to reduce year-end resin inventories about two months earlier than usual.

At the same time, resin suppliers reduced operating rates, which had been above 90% for most of the year, and dramatically liquidated their polyolefin inventories through aggressive competitive pricing in secondary markets. Industry sources now believe polyolefin prices have bottomed out, and suppliers are poised to push new price increases starting this month. PVC prices are expected to hit bottom soon, and polystyrene may already have turned around.

Pricing projections for 2007 are sketchy at best. Most industry sources hesitate to venture beyond the first quarter, citing the difficulty of gauging how energy and feedstock prices will fare. Michael Greenberg, CEO of The Plastics Exchange, a Chicago-based resin-trading web site, believes the balance of supply and demand will shift pricing power toward resin suppliers, particularly in polypropylene. He adds, “In the long run, energy and feedstock prices will remain the largest influence on resin prices.”

 

PE prices hit bottom

Last year, polyethylene prices went up 11¢/lb in the second and third quarters, followed by a plunge of 17¢ in the fourth quarter. Suppliers aim to recoup 6¢ as of Jan. 1. Most industry sources think PE prices have bottomed out, and PE suppliers appear bullish that they will be able to raise prices this month.

Mike Burns, managing partner of resin purchasing consultant Resin Technology, Inc. (RTI) in Fort Worth, Texas, says this of the first couple of months of 2007: “Generally, we expect a flat market, but with a hard push from resin suppliers to implement price increases. We are telling processors that prices are unlikely to move up until at least February.”

However, the London Metal Exchange (LME) short-term futures contract for January in g-p blown-film butene LLDPE sold at 52.2¢/lb, up from December’s 50.1¢/lb.

Contributing factors: In the last couple of months, plant operating rates dropped from over 90% to the mid-80s. Nonetheless, one major supplier says, “PE spot prices have stabilized while prime resin prices have dropped, so the difference is now the typical 5¢ to 6¢/lb. We don’t expect to see lots of spot resin available. We see the destocking and seasonal slowdown coming to an end. We have even seen some December prebuying in anticipation of price increases.” Ethylene monomer prices are also considered likely to firm up because supply is tight.

Resin demand for 2006 was expected to show at least a 2% increase over the previous year. Suppliers expect another banner month for exports this January because North American PE resin is based on natural gas feedstock, which costs less than crude oil.

Demand growth for this year is generally projected at about 2% to 3%. “I expect demand will be less in the first quarter and supply/demand will be balanced or a bit tighter in the second and third quarters,” predicts one supplier. Based on this scenario, some sources say price increases could be issued in the first quarter.

 

PP prices on the upswing

Polypropylene prices in 2006 rose by 10¢ to 12¢/lb but dropped about that much by mid-November. A price hike emerged in early December when Ineos and Basell issued a 5¢/lb increase for Jan. 1. Believing PP prices to have bottomed out, industry sources expected this increase to gather strength. Meanwhile, LME’s January futures contract for g-p injection-grade homopolymer sold at 53.4¢/lb, up from December’s 50.1¢.

Contributing factors: Industry sources expect upward pricing pressure on PP resin for at least the first quarter due to a push from energy prices (both crude oil and natural gas). They note that while PP prices are low, there is not a lot of margin between the resin and monomer. Says Scott Newell, a managing partner at RTI, “Propylene monomer prices have bottomed out, dropping 9¢/lb in November to 40.5¢/lb. December contracts could rise a bit, but no more than 0.5¢/lb.

Says Newell, “The market was extremely oversupplied for 30 to 60 days, but then PP resin suppliers dropped operating rates and the export market also picked up significantly for them.” Demand for PP through October was down 1.6%. Some suppliers indicated that year-end sales appeared a bit stronger, so 2006 overall could possibly show flat instead of negative growth. Growth projections for 2007 are a cautious 2% to 3%.

PP operating rates were in the 90% to 95% range for most of the year but dropped to the mid-80s by the end of November. Inventory levels at suppliers and customers are said to be very low. Says RTI’s Newell, “We see domestic processors starting to restock. They think PP prices are at or near the bottom, so it is risky not to start buying because prices will likely move up.”

 

PET prices down

Last year saw PET prices rise 12¢ to 15¢/lb, but a sharp decrease of 8¢ between September and November brought the net increase to about 4¢/lb. Domestic demand grew about 7%, now considered typical for PET, although suppliers concede that it slipped by year’s end due typical end-of-year inventory destocking and anticipation of possible further price decline. Some industry sources say PET prices this year could remain about where they wound up at the close of 2006.

Contributing factors: PET suppliers say their profit margins were slashed by 50% last year, as feedstock tabs rose faster than resin prices. Then PET prices dropped after a sharp decrease in prices of feedstocks paraxylene and ethylene glycol. December contract prices for paraxylene appeared likely to rise a couple of cents.

Although demand growth of about 7% is projected for 2007, the PET market will look quite different from the past two years. Says one major supplier, “After a tight 2005, and a somewhat balanced 2006, the market will be oversupplied this year and into the next. Supply and demand are not expected to be balanced until 2009.” This is a result of about 20% growth in domestic resin capacity due to new plants being brought on stream by Wellman (500 million lb/yr last July), Eastman (770 million lb starting up now), and DAK Americas (400 million lb coming soon). Says one industry source, “The domestic market is approximately 8 billion lb/yr, so it will take some time for all that new capacity to be absorbed.” As a result, PET plant utilization rates, which had been in the 90% to 95% range through most of 2006, are expected to drop this year to the upper 70s or low 80s.

 

PVC prices look soft for ’07

PVC prices were slumping again last month. Pipe producers expected the slide to cut 2¢ in December, 1¢ more in January, and then flatten out.

Contributing factors: Overall PVC demand in 2006 was flat, as the drop in housing starts began to be felt. The American Plastics Council reported domestic production for the first nine months of 2006 down about 1% from 2005. But taking into account Asian imports, which made up for post-hurricane disruptions early last year, total domestic PVC consumption was either flat or up a little bit. Demand in December was so slow that processors closed plants around Dec. 20 for an unusual 10-day shutdown. Because of slower home sales, market observers are predicting that PVC demand will continue to slow for at least the first six months of 2007.

 

PS prices up, demand down

Polystyrene resin producers are all asking for a 3¢/lb increase Jan. 1. EPS producers announced 4¢ hikes for Jan. 15.

Contributing factors: APC data show PS demand down 3% for the first three quarters of 2006, with no sign of improvement in the fourth quarter. The consensus for 2007 is that since Dow and Nova each took 300 million lb/yr of PS capacity out of the market in ’06, pricing shouldn’t be too soft. Resin demand, however, may slip further. Demand for crystal PS is stronger than for HIPS, largely because of foam packaging applications. HIPS has felt more competitive pressure from PP and coated paper. North American styrene monomer is flowing to Asia, where prices are higher–an outflow that could tighten monomer supplies and raise prices here in ’07. Meanwhile, the downward trend in benzene prices appeared to end in mid December, when spot benzene tabs began to rise again. 

 

 

Market Prices Effective Mid-Dec A
 
 RESIN GRADEb¢/LB¢/CU INc 

 ABS 

  

  
 
 MED IMPACT   84 - 90     3.1 - 3.4    
 HI IMPACT   89 - 125     3.3 - 4.7    
 X-HI IMPACT   99 - 140     3.7 - 5.3    
 HI HEAT   89 - 110     3.3 - 3.8    
 PIPE   89 - 110     3.3 - 4.1    
 SHEET   94 - 110     3.5 - 4.2    
 TRANSPARENT   129 - 165     5.1 - 6.4    
 FITTINGS   89 - 115     3.3 - 4.3    
 PLATING   99 - 105     3.7 - 3.9    
 FLAME RET   124 - 140     4.6 - 5.9    
 STRUCT FM   87 - 97     3.2 - 4.3    
 10% GLASS   129 - 140     4.8 - 5.6    
 30% GLASS   124 - 136     4.6 - 6.3    
 ABS/PC ALLOY   149 - 180     5.5 - 6.8    
 ABS/PVC ALLOY   134 - 139     5.0 - 5.2    
 ABS/NYLON ALLOY   194     7.3    


 ACETAL 

  

  
 
 HOMOPOL   151 - 172     7.7 - 8.7    
 20% GLASS   171 - 235     8.7 - 11.9    
 COPOLYMER   144 - 160     7.3 - 8.1    
 25% GLASS   171 - 245     8.7 - 12.4    


 ACRYLIC 

  

  
 
 G-P   117     5.0    
 IMPACT   192     8.2    


 ACRYLONITRILE COPOL 

  

  
 
 EXTRUSION   101 - 116     4.0 - 4.6    
 INJECTION   120 - 135     4.8 - 5.4    


 ALKYD 

65 - 74   

4.9 - 5.5   
 


 CELLULOSICS 

  

  
 
 ACETATE   187     8.6    
 CAB   189     8.2    
 CAP   189     8.2    


 DAP (G-P) 

251 - 497   

16.7 - 34.7   
 


 EPOXY 

  

  
 
 G-P RESIN   116 - 126     NAd    
 COMPOUNDS          
 C/B/Te   123 - 166     9.4 - 12.9    
 R/C/Df   208 - 271     15.3 - 20.1    
 SEMICONDUCTOR          
 NOVOLAC   193 - 228     13.1 - 15.9    
 ANHYDRIDE   188 - 268     13.9 - 19.2    


 EVA 

  

  
 
 INJECTION   46 - 52     1.5 - 1.7    
 FILM EXTRU   42 - 49     1.4 - 1.6    


 EVOH 

265   

11.3   
 


 FLUORO-POLYMER 

  

  
 
 CTFE   5000 - 6000    385 - 462    
 ECTFE   1470 - 1680    93.1 - 107.7   
 ETFE   1155 - 1680    70.7 - 102.8   
 FEP   971 - 1470     74.8 - 113.2   
 PFA   1785 - 2520    134.9 - 190.5    
 PTFE   450 - 900     34.8 - 69.7    
 PVDF   680 - 900     43.3 - 57.3    


 IONOMER 

  

  
 
 PACKAGING   127 - 166     4.3 - 6.0    
 INDUSTRIAL   150 - 244     5.0 - 8.3    


 LIQUID-CRYSTAL POLYMERS 

  

  
 
 INJECTION MIN FILLED   690 - 1035     44.2 - 72.1    
 GLASS FILLED   695 - 895     40 - 52    
 CARBON FILLED   1700 - 2000    83.2 - 138.6   
 UNFILLED   1000 - 1200    58 - 70    
 EXTRUSION UNFILLED   1200 - 2200    60.5 - 110.9   


 MELAMINE COMPOUND 

90 - 94   

5.5 - 5.6   
 


 MELAMINE/PHENOLIC COMPOUND 

75 - 83   

4.5 - 5.0   
 


 NYLON 

  

  
 
 TYPE 6   139 - 159     5.7 - 6.5    
 MIN FILLED   131 - 144     5.4 - 5.9    
 30% GLASS   148 - 173     6.0 - 7.0    
 TYPE 66   153 - 168     6.3 - 6.9    
 MIN FILLED   151 - 159     6.2 - 6.5    
 30% GLASS   142 - 192     5.8 - 7.9    
 TYPE 69   250 - 276     9.7 - 10.7    
 TYPE 6/10   286 - 313     12.4 - 13.6    
 TYPE 612   400     15.3    
 30% GLASS   309 - 311     14.7    
 40% GLASS   309     14.7    
 TYPE 46   295     12.6    
 TYPE 11   329 - 341     13.6 - 14.1    
 30% GLASS   331 - 350     15.0 - 15.8    
 40% GLASS   347 - 360     17.7 - 18.5    
 TYPE 12   318 - 341     12.1 - 13.0    
 30% GLASS   327 - 350     14.7 - 15.8    
 50% GLASS   299 - 340     15.6 - 17.8    
 TRANSPARENT AMORPHOUS   247 - 360     10.3 - 15.0    


 PHENOLIC MOLD COMP 

75   

3.8   
 
 REINFORCED GRADES   105 - 268     6.1 - 16    


 POLYAMIDE-IMIDEg 

  

  
 
 UNFILLED   2750     148.5    
 30% GLASS   2500     135    
 30% CARBON FIB.   3500     185    


 POLYARYLATE 

200 - 280   

8.8 - 12.3   
 


 POLYARYL SULFONE 

440   

21.8   
 


 POLYBUTYLENE 

  

  
 
 G-P   94 - 96     3.1    
 FILM   88 - 91     2.9    
 PIPE          
 COLD WATER   116 - 120     3.9 - 4.0    
 HOT WATER   162 - 166     5.5 - 5.6    


 POLYCARBONATE 

  

  
 
 INJECTION   138 - 165     5.9 - 7.0    
 20% GLASS   177 - 190     7.6 - 8.2    
 30% GLASS   178 - 217     7.6 - 9.3    
 EXTRUSION   145 - 180     6.3 - 7.8    
 BLOW MOLD   155 - 190     6.7 - 8.2    
 STRUCT FOAM   149 - 181     6.4 - 7.8    
 20% GLASS   235 - 255     10.1 - 11.0    
 FR   166 - 197     7.1 - 8.5    
 CD   140 - 200     6.0 - 8.6    


 POLYESTER (TP) PBT TYPE 

  

  
 
 UNFILLED   143 - 150     6.9    
 HI-IMP   156 - 167     19.6 - 21    
 30% GLASS, FR   185 - 207     11.9    
 STRUCT FOAM   159 - 165     NAd    


 PET 

  

  
 
 BOTTLE (RAILCAR)   78 - 80 Prices Went Down 
  3.9 - 4.0 Prices Went Down 
 
 MOD PET          
 30% GLASS   132 - 143     7.4    
 55% GLASS   148 - 155     9.8    
 30% GLASS FLAME RET   147 - 157     9.2    
 PETG COPOL   114 - 124     5.2 - 5.6    
 RESIN GRADEb¢/LB¢/CU INc 


 POLYESTER THERMOSET 

  

  
 
 G-P ORTHO   140 - 145     NAd    
 ISOPHTHALIC   165 - 175     NAd    
 BIS-A   210 - 215     NAd    


 PEEK 

4400   

231   
 
 30% GLASS   3300     173    


 POLYETHERIMIDE 

641 - 646   

29.3 - 29.5   
 
 30% GLASS   526 - 531     24.0 - 24.2    


 POLYETHERKETONE (PEK) 

2950   

130.1   
 
 30% GLASS   2600     153    


 POLYETHERSULFONE 

350 - 400   

17.2 - 19.7   
 
 30% GLASS   425 - 525     21 - 25.9    


 POLYETHYLENE (RAILCAR) LDPE 

  

  
 
 G-P MOLDING & EXTRU   79 - 81 Prices Went Down 
  2.6 - 2.7 Prices Went Down 
 
 INJECTION   80 - 82 Prices Went Down 
  2.7 Prices Went Down 
 
 LID RESIN   82 - 84 Prices Went Down 
  2.7 - 2.8 Prices Went Down 
 
 LINER   76 - 78 Prices Went Down 
  2.5 - 2.6 Prices Went Down 
 
 CLARITY   75 - 77 Prices Went Down 
  2.5 - 2.6 Prices Went Down 
 
 EXTRU COATG   79 - 81 Prices Went Down 
  2.6 - 2.7 Prices Went Down 
 
 BLOW MOLD   82 - 84 Prices Went Down 
  2.7 - 2.8 Prices Went Down 
 


 LLDPE, BUTENE BASED 

  

  
 
 G-P MOLDING   65 - 67 Prices Went Down 
  2.2 - 2.6 Prices Went Down 
 
 LME 30-DAYj   67 - 69 Prices Went Down 
  2.3 - 2.4 Prices Went Down 
 
 FILM   52.2 Prices Went Up  
  1.8 Prices Went Up  
 
 ROTOMOLD   69 - 71 Prices Went Down 
  2.3 - 2.4 Prices Went Down 
 


 LLDPE, HAO-BASED 

  

  
 
 G-P MOLDING   70 - 72 Prices Went Down 
  2.4 Prices Went Down 
 
 LID RESIN   80 - 82 Prices Went Down 
  2.7 Prices Went Down 
 
 LINER FILM   74 - 76 Prices Went Down 
  2.5 - 2.6 Prices Went Down 
 


 HDPE 

  

  
 
 G-P INJ MOLD   67 - 69 Prices Went Down 
  2.4 Prices Went Down 
 
 FILM   74 - 76 Prices Went Down 
  2.5 - 2.6 Prices Went Down 
 
 BLOW MOLD   70 - 72 Prices Went Down 
  2.4 - 2.5 Prices Went Down 
 

 HMW-HDPE 

  

  
 
 BLOW MOLDING   74 - 76 Prices Went Down 
  2.5 - 2.6 Prices Went Down 
 
 FILM   73 - 75 Prices Went Down 
  2.5 Prices Went Down 
 
 PIPE   81 - 83 Prices Went Down 
  2.7 - 2.8 Prices Went Down 
 


 UHMW-PE 

100 - 125   

3.6 - 3.7   
 


 PPE/PPO BASED RESIN 

  

  
 
 INJECTION   180     6.8    
 20% GLASSh   283     12.3    
 30% GLASSh   291     13.3    
 EXTRUSIONh   242     9.2    
 STRUCT FM   231     NAd    


 PPS 

  

  
 
 40% GLASS   357 - 404     21.2 - 24.0    
 55% GLASS/MINERAL   289 - 310     20.8 - 22.3    
 65% GLASS/MINERAL   226 - 273     15.5 - 18.7    


 POLYPROPYLENE (RAILCAR) 

  

  
 
 G-P HOMOPOL INJECTION   76 - 78 Prices Went Down 
  2.5 - 2.6 Prices Went Down 
 
 LME 30-DAYj   53.4 Prices Went Up  
  1.7 Prices Went Up  
 
 EXTRUSION FIBER   74 - 76 Prices Went Down 
  2.5 Prices Went Down 
 
 PROFILES   80 - 82 Prices Went Down 
  2.6 Prices Went Down 
 
 RANDOM COPOL   81 - 83 Prices Went Down 
  2.6 - 2.7 Prices Went Down 
 
 BLOW MOLDING   81 - 83 Prices Went Down 
  2.6 - 2.7 Prices Went Down 
 
 FILM   81 - 83 Prices Went Down 
  2.6 - 2.7 Prices Went Down 
 
 INJECTION   78 - 80 Prices Went Down 
  2.6 Prices Went Down 
 
 IMPACT COPOL          
 MED IMP   88 - 90 Prices Went Down 
  2.9 Prices Went Down 
 
 HI IMP   91 - 93 Prices Went Down 
  3.0 Prices Went Down 
 


 POLYSTYRENE (RAILCAR) 

  

  
 
 G-P CRYSTAL   79 - 85     3.0 - 3.3    
 HI HEAT   82 - 88     3.1 - 3.3    
 HIPS   80 - 85     3.0 - 3.3    
 SUPER HI IMP   90 - 94     3.2 - 3.5    
 FR   98 - 106     3.7 - 4.0    
 STRUCT FM (FR)   105 - 108     NA    


 EPS 

  

  
 
 UNMODIFIED   85 - 88     NAd    
 MODIFIED   86 - 90     NAd    


 POLYSULFONE 

569   

25   
 
 10% GLASS 430 20.6   669     32    
 30% GLASS 372 20.01   609     20    


 POLYURETHANE (TP) 

  

  
 
 ESTER TYPE   185 - 255     8 - 11    
 ETHER TYPE   245 - 295     10.6 - 13    


 PU ISOCYANATES 

  

  
 
 POLYMERIC MDI   118 - 135     NAd    
 80/20 TDI   145 - 155     NAd    


 PVC RESIN (RAILCAR) 

  

  
 
 G-P HOMOPOL   50 - 52 Prices Went Down 
  NAd    
 PIPE   49 Prices Went Down 
  NAd    
 FILM   58 - 61 Prices Went Down 
  NAd    
 COPOLYMER FLOORING   68 - 70     NAd    
 DISPERSION HOMOPOLY   81 - 87     NAd    
 COPOLYMER   86 - 90     NAd    
 CPVC PIPE COMPOUND   119     NAd    


 PVDC 

  

  
 
 EXTRUDABLE   162     NAd    


 SILICONES 

  

  
 
 MOLD. COMP.   581 - 640     38.1 - 39.3    
 SPECIALTY GR.   891 - 3148    NAd    
 SILICONE/EPOXY   339 - 343     22.5 - 22.8    


 STYRENEACRYLIC 

108 - 112   

3.7 - 4.0   
 


 SAN (G-P) 

66 - 74   

2.5 - 2.8   
 


 STYRENE MALEIC ANHYDRIDE 

  

  
 
 G-P   110 - 115     4.2 - 4.3    
 HI IMP   130 - 140     4.2 - 4.5    
 FR   175 - 183     6.7 - 7.0    


 TP ELASTOMERS 

  

  
 
 OLEFINIC   70 - 76     2.4    
 POLYAMIDE   300 - 350     10.9 - 12.7    
 POLYESTER   200 - 310     8.8 - 13.6    
 STYRENIC   82 - 237     2.9 - 8.3    


 UREA MOLDING COMPOUND 

  

  
 
 BLACK & BROWN   76     3.8    
 WHITE & IVORY   81     4.0    


 VINYL ESTER 

  

  
 
 COR RES   218 - 230     NAd    
 HEAT & COR RES   243     NAd    

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. jLME 30-day futures contract for lots of 54,564 lb..