Last year saw significant increases in prices of commodity thermoplastics, driven by unprecedented energy and feedstock costs.

Last year saw significant increases in prices of commodity thermoplastics, driven by unprecedented energy and feedstock costs. Moreover, a robust export market fed by the weak U.S. dollar offset lackluster domestic demand, keeping resin supplies tight to balanced. One brighter spot was the significant drop in imports of finished goods, which is expected to continue. All in all, the majority view is that—barring a recession—prices will remain flat or could rise in the first half, though there is some chance of price relief in PVC and perhaps PP.

 

CONTINUED PRESSURE ON PE PRICES

Polyethylene prices rose a total of 24¢ to 26¢/lb in 2007, leaving them just 5¢ below their all-time high in the fall of 2005. Resin makers have pushed back their 6¢ increase announced for Dec. 1 and the 5¢ hike for Dec. 15. Meanwhile, the London Metal Exchange (LME) short-term North American futures contract for January in blown film butene LLDPE was 62.6¢/lb, up from December’s 60.8¢.

Contributing factors: Although price pressure from ethylene monomer showed signs of abating in December, other factors are expected to keep pushing PE prices upward, through at least the first quarter. Higher oil prices are one key factor. The other, driven by the weak dollar, is continued strong export demand from Europe and China. The latter is poised to play a bigger role due to a serious shortage in diesel fuel due to high crude oil prices, which has cut Chinese ethylene production by 10%, thus curtailing PE resin production. “We don’t see any significant relief in resin prices until after the first quarter. It will be an export-driven first quarter,” says Mike Burns, global business director of PE at resin purchasing consultant Resin Technology, Inc. (RTI), Fort Worth, Texas.

Says a source at one major PE supplier, “There is no question that these higher prices continue to put a lot of pressure on our customer base. The key is to manage their business well, which includes not getting into contracts with their customers where they are locked into pricing.”

Though high exports lifted overall demand for PE 4.5% through the third quarter, domestic demand was flat if not a bit lower than in 2006. Domestic demand for 2008 is cautiously projected to be flat or a slight uptick. Plant operating rates in 2007 were at 95% through September, and dropped to 92% by year’s end. For 2008, plant operating rates are projected to remain in the same range.

 

PP PRICES UP

Polypropylene prices in 2007 rose a total of 18¢/lb through November. Suppliers’ 6¢ increase for Dec. 1 was pushed back to January, even though an additional hike of 3¢/lb was announced for Jan. 1. Meanwhile, LME’s January North American futures contract for g-p injection-grade homopolymer sold at 65.5¢/lb, up from December’s 64.6¢.

Contributing factors: The main driver in PP resin prices has been the unprecedented propylene monomer tabs. November monomer contract prices rose a whopping 7.25¢, reaching a record high of 61.5¢/lb—10¢ higher than even in the fall of 2005, following supply disruptions caused by Hurricane Katrina. December contract bids ranged from 3¢ to 9¢/lb and will probably settle somewhere in the middle. “High monomer prices have started to affect resin demand, so that exports, which have been the saving grace for PP resin suppliers, are not as attractive for suppliers,” says Scott Newell, director of client services for PP at RTI.

Late last year, Newell and other industry sources saw a growing gap between PP resin prices for prime and secondary resin markets, which had been very close all year. Still, no one is projecting any price relief in this quarter. A big factor is shutdowns of older PP capacity early in the year, and questions about how soon the new replacement capacity will actually come on stream. One major supplier notes that PP supply could be tight through at least the first quarter.

Shutdowns include Dow’s 500-million-lb plant in Louisiana, two Basell Canadian plants totaling 900 million lb, and Ineos’ 450-million-lb unit in Texas. Upcoming new capacity includes Basell’s restart of 450 million lb in Texas; debottlenecking by Total and Formosa, each at 100 to 200 million lb/yr; and 900 million lb of new capacity from the Basell/Indelpro joint venture in Mexico. According to RTI’s Newell, the latter will reduce U.S. PP exports to Mexico, which have averaged 110 million lb/month.

Says Newell, “I don’t see any major reduction in resin prices if crude oil prices stay in the $85 to $95/barrel range. Also, PP supply has been very tightly balanced. There is some potential for lower PP prices if prices of propylene monomer drops 3¢ to 5¢.” On the other hand, one leading supplier holds out hope for some price relief from lower monomer prices and lower PP exports. Industry sources generally project that PP prices will be somewhat higher than last year, barring a drop in crude oil prices. Newell from RTI sees PP prices moving up or down within a 10¢ window.

Domestic PP demand in 2007 grew only 1% to 2%. Similar growth is expected this year by most industry sources. But one major supplier thinks growth could return to more typical levels of 3% because the weak dollar has made finished-product imports more costly.

 

FLAT PRICES AHEAD FOR PVC

In November, PVC producers say they implemented 4¢ of the 6¢/lb increase they asked for, but one published chemical price index says they got only 3¢. Resin makers issued a TVA for the remaining 2-3¢ in December. January contract prices were expected to slip lower. Export prices were also dropping.

Contributing factors: Domestic PVC demand for 2007 was expected to end the year off about 6% from 2006. Total demand, however, could be down only 3%, buoyed by strong exports, which were up about 37%. Industry sources attribute export demand primarily to the weak dollar.

The market expects next year to be down in the first half, and then to pick up slightly in the second half, unless a recession strikes. Shintech told customers it will bring its new Louisiana plant up in the first quarter, but they expect it in the second quarter or later. Georgia Gulf plans to shut temporarily its 450-million-lb plant in Sarnia, Ont.

 

PS WILL STAY HIGH

In November, polystyrene producers asked for a 4¢/lb increase, of which they got 2¢ and delayed 2¢. At mid-month, December prices were flat, but not eroding. Meanwhile, Chevron and Ineos/Nova announced 4¢/lb increases for Jan. 1. The narrowed price premium for PS over PP, now only about 4¢/lb vs. as much as 16-18¢ previously, isn’t expected to last long.

Contributing factors: PS usage was down about 4.7% in 2007. With EPS included, demand was down 3.5%. If there is no recession, PS could expect modest growth this year. But PS producers already see a recession in domestic durables like refrigerators.

Expect more plant closures as suppliers shed older capacity. Ineos Nova, for example, will shut down this month its 220-million-lb Belpre, Ohio, plant, which represents 12% of its North American PS capacity. Last month, the company shut down its Montreal plant, which produced 120 million lb. Meanwhile, the joint venture of Dow and Chevron Phillips, to be called Americas Styrenics, is expected to start up in this quarter with headquarters in Houston. 

 

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

 ABS 

  

  
 
 MED IMPACT   84 - 95     3.2 - 3.6    
 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 - 100     3.7 - 3.8    
 SHEET   94 - 110     3.5 - 4.2    
 TRANSPARENT   129 - 200     5.6 - 8.8    
 FITTINGS   89 - 110     3.5 - 4.3    
 PLATING   160     6.0    
 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 - 350     9.0 - 16    


 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   69 - 71     2.3 - 2.4    
 FILM EXTRU   67 - 69     2.3    


 EVOH 

330   

15   
 


 FLUORO-POLYMER 

  

  
 
 CTFE   5000 - 6000     385 - 462    
 ECTFE   1200 - 1680     90.7 - 120    
 ETFE   1155 - 1680     70.7 - 102.8    
 FEP   971 - 1470     74.8 - 113.2    
 PFA   1550 - 2520     120 - 195    
 PTFE   450 - 900     34.8 - 69.7    
 PVDF   660 - 1000     49.9 - 75.6    


 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   171 - 182     7.4 - 7.9    
 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   150 - 185     7.0 - 7.5    
 STRUCT FOAM   149 - 181     6.4 - 7.8    
 20% GLASS   235 - 255     10.1 - 11.0    
 FR   166 - 197     7.1 - 8.5    
 CD   135 - 195     5.8 - 8.4    


 POLYESTER (TP) PBT TYPE 

  

  
 
 UNFILLED   145 - 150     6.8 - 7.3    
 HI-IMP   165 - 175     7.8 - 8.3    
 30% GLASS, FR   195 - 215     9.2 - 10.1    
 STRUCT FOAM   159 - 165     NAd    


 PET 

  

  
 
 BOTTLE (RAILCAR)   78 - 80     4.0    
 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   142 - 152     NAd    
 ISOPHTHALIC   170 - 185     NAd    
 BIS-A   205 - 225     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   78 - 80     2.6    
 INJECTION   80 - 82     2.6 - 2.7    
 LID RESIN   82 - 84     2.7    
 LINER   77 - 79     2.6    
 CLARITY   76 - 78     2.5 - 2.6    
 EXTRU COATG   81 - 82     2.6 - 2.7    
 BLOW MOLD   83 - 85     2.7 - 2.8    


 LLDPE, BUTENE BASED 

  

  
 
 G-P MOLDING   75 - 77     2.5 - 2.6    
 LME 30-DAYj   62.6 Prices Went Up  
  2.2 Prices Went Up  
 
 FILM   77 - 79     2.6    
 ROTOMOLD   77 - 79     2.6    


 LLDPE, HAO-BASED 

  

  
 
 G-P MOLDING   78 - 80     2.4 - 2.5    
 LID RESIN   88 - 90     2.7 - 2.8    
 LINER FILM   81 - 83     2.5 - 2.6    


 HDPE 

  

  
 
 G-P INJ MOLD   75 - 77     2.5 - 2.6    
 FILM   84 - 86     2.8    
 BLOW MOLD   85 - 87     2.8 - 2.9    

 HMW-HDPE 

  

  
 
 BLOW MOLDING   82 - 84     2.6 - 2.7    
 FILM   83 - 85     2.6 - 2.7    
 PIPE   90 - 92     2.9 - 3.0    


 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   450 - 520     27.0 - 31.2   
 55% GLASS/MINERAL   345 - 420     22.7 - 27.7   
 65% GLASS/MINERAL   270 - 315     18.9 - 22.1   


 POLYPROPYLENE (RAILCAR) 

  

  
 
 G-P HOMOPOL INJECTION   81 - 83     2.6 - 2.7    
 LME 30-DAYj   65.5 Prices Went Up  
  2.3 Prices Went Up  
 
 EXTRUSION FIBER   79 - 81     2.5 - 2.6    
 PROFILES   84 - 86     2.7    
 RANDOM COPOL          
 BLOW MOLDING   85 - 87     2.7 - 2.8    
 FILM   85 - 87     2.7 - 2.8    
 INJECTION   84 - 86     2.7    
 IMPACT COPOL          
 MED IMP   95 - 97     3.0 - 3.1    
 HI IMP   97 - 99     3.1 - 3.2    


 POLYSTYRENE (RAILCAR) 

  

  
 
 G-P CRYSTAL   86 - 92     3.2 - 3.4    
 HI HEAT   89 - 95     3.3 - 3.6    
 HIPS   87 - 92     3.3 - 3.4    
 SUPER HI IMP   97 - 101     3.6 - 3.8    
 FR   102 - 110     3.8 - 4.1    
 STRUCT FM (FR)   105 - 108     NA    


 EPS 

  

  
 
 UNMODIFIED   85 - 88     NAd    
 MODIFIED   86 - 90     NAd    


 POLYSULFONE 

650 - 750   

29 - 33   
 
 10% GLASS 430 20.6   799 - 875     36 - 39    
 30% GLASS 372 20.01   699 - 775     31 - 35    


 POLYURETHANE (TP) 

  

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


 PU ISOCYANATES 

  

  
 
 POLYMERIC MDI   125 - 145     NAd    
 80/20 TDI   135 - 145     NAd    


 PVC RESIN (RAILCAR) 

  

  
 
 G-P HOMOPOL   56 - 58     NAd    
 PIPE   55     NAd    
 FILM   61 - 63     NAd    
 COPOLYMER FLOORING   69 - 74     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) 

80 - 88   

3.0 - 3.3   
 


 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          
 WHITE & IVORY          


 VINYL ESTER 

  

  
 
 COR RES   218 - 235     NAd    
 HEAT & COR RES   243 - 248     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..