With demand for all commodity resins exceedingly weak, and feedstock prices fallen through the floor, there appears to be nothing to stop resin tabs from shrinking further in 2009.

With demand for all commodity resins exceedingly weak, and feedstock prices fallen through the floor, there appears to be nothing to stop resin tabs from shrinking further in 2009. That hasn’t stopped polyolefins producers from making an attempt to raise prices in the teeth of this “perfect storm.”

Putting it all in perspective, Bill Bowie, president of resin purchasing consultants Resin Technology, Inc. (RTI) in Fort Worth, Texas, says, “Barring some major global event, we may see a more stable resin pricing environment globally as economies start to rebuild themselves. Our advice to plastics processors during this time is to take a careful look at your business to find opportunities for change that will allow you to weather this downturn. This includes identifying opportunities to use lower-cost resins. I also think processors should broaden their opportunities by dealing with more suppliers.”

Bowie notes that there are some real questions about which resin suppliers will remain standing. By dealing with at least two to three suppliers, he says, you won’t be left in the lurch if one of your suppliers quits the market, through divesting a resin business or otherwise.

For the future, he advises, “Always look out for the key indicators, like prices and availability of chemical feedstocks to get a better feel for where things are heading. I think an early glimmer of an upturn is very likely to come from China, when we see their GDP rising and factories humming again.”

 

PE: TIME FOR A HIKE?

Overall, polyethylene prices are projected to be 25% lower in 2009 vs. 2008. Those prices, which climbed 18¢/lb in 2008 (and a total of 42¢ since 2007), had declined 33¢ through November. Another drop of as much as 10¢ was possible by the end of December. Declaring that resin tabs had “bottomed out,” PE suppliers dared to issue a price increase of 7¢/lb for Jan. 1. That view was not supported by the direction of the London Metal Exchange (LME) short-term North American futures contract in blown-film butene LLDPE. It hit 19.7¢/lb for January, a steep drop from December’s 58.7¢.

Contributing factors: Industry sources see potential for “relative stability” in prices during most of the first quarter, primarily because feedstock prices are projected to be stable as well. “Pay attention to what spot ethylene and precursor ethane prices are doing,” advises Mike Burns, RTI’s global business director for PE. Ethylene contract prices dropped to 38¢/lb in November, 25¢ lower than in September. December contracts were expected to drop another 8¢ to 10¢. Meanwhile, spot prices were at a low of 15¢ to 16¢/lb.

The consensus of industry analysts is that the new PE price initiative is not likely to take hold until later in the first quarter. “You can expect to see ethylene spot prices come up to about 20¢/lb or more, at which point ethylene contract prices will move up some. PE resin suppliers may then be able to implement 3¢ to 5¢ of their 7¢/lb increase,” says RTI’s Burns.

Meanwhile, following a 4% to 6% drop in PE demand in 2007, PE demand in 2008 was down by the same amount for high-demand products like film resins, and as much as 15% lower for other types, such as injection molding grades for containers. While no one is willing to cite a number for how demand will fare this year, there is an expectation of further declines. Resin suppliers are likely to implement more production cutbacks.

Sums up RTI’s Burns, “In 2008, 10 billion lb, or 25%, of North American PE production was exported. In 2009, the PE export market may not exist if there is no change in the global economy. Domestic suppliers would need to reduce production by 10 billion lb before cutbacks would impact resin pricing.”

 

PP PRICES PLUNGE

Polypropylene prices were expected to end 2008 68¢ to 70¢/lb below their high point for the year. From their peak in July-August, PP tabs declined by 57¢ through November, which left prices 32¢ below their level at the start of the year. At least 10¢ more was expected to come off in December. Claiming prices had hit bottom, suppliers announced hikes of 5¢ to 6¢/lb for Jan.1. However, the LME’s North American short-term futures contract for January in g-p injection-grade homopolymer plunged to 29.8¢/lb from December’s 37¢.

Contributing factors: Domestic PP demand was down 7% by the end of the third quarter and was expected to be down 10% to 12% by the end of 2008. Scott Newell, RTI’s director of client services for PP expects to see more shutdowns of PP capacity, some permanent and some temporary.

Propylene monomer is in oversupply due to slack demand. By the end of 2008, monomer price was down 65¢/lb from the peak in mid-summer. December contract prices were expected to come down at least another 10¢ to about 20¢/lb. “The last time we saw propylene monomer and PP resin prices this low was in the summer of 2003,” notes Newell. He expected that monomer and PP resin prices would hit bottom in December and would stabilize this month.

As for the announced PP price hike, Newell says, “We expect to see at least a portion of that increase take hold in the first quarter. The big question is: where is the real demand? This is a tough call without knowing where our economy and global economics in general will go. What will happen to crude oil prices? Will they go down to $25/barrel or up to $65/barrel?”

 

PVC IN ’09: FLAT TO DOWN

PVC prices were expected to fall 6¢ to 7¢/lb in December. Early last month, Formosa announced a 5¢/lb increase for Jan. 1, but at mid-month the move wasn’t supported by other producers.

Contributing factors: Demand in December was extremely weak. Overall PVC demand for 2008 was expected to end 9% to 9.5% below the year before. Optimistic resin producers say PVC demand in 2009 will be flat or down at most 1% to 2%. Their “worst-case” scenario is a 5% to 6% drop in demand this year because of the downturn in construction. Housing starts are expected to stay weak—below 600,000 units, vs. over 1 million in a normal economy. And any recovery in the housing market will have to work through a large inventory of unsold homes before new construction will resume.

Resin suppliers’ operating rates are believed to have been below 60% for the fourth quarter. In mid October, Shintech started up 650 million lb of its new 1.3-billion-lb plant in Iberville, La. At the same time, Shintech took an early scheduled maintenance shutdown at its 1.1-billion-lb plant in Addis, La., temporarily avoiding further excess resin capacity. Some older PVC plants are expected to close this year.

 

PS KEEPS DROPPING

Polystyrene resin producers and analysts expected prices to fall 12.5¢/lb in December after a plunge of 20¢ in November. PS prices are expected to be flat or lower in 2009, especially in the seasonally weak first and second quarters.

Contributing factors: The price of benzene feedstock continued to fall in December. Contract benzene was $1.07/gal, down from $1.60 in November. Spot prices dipped as low as 80¢, which is below cost. Benzene is expected to stay long throughout 2009, as new environmental regulations gradually reduce the amount of aromatics that can be put into gasoline, increasing the amount of toluene that will go into benzene instead.

Demand for PS was severely weak in November and December, so total demand for 2008 could end up as much as 9% to 10% below 2007. Resin operating rates were believed to be in the 70% to 74% range last month.

 

PET PRICES PLUMMET

PET prices plunged at least 15¢/lb between September and November, following a drop of 5¢ in August, and were expected to slip a bit lower last month. PET prices are expected to be flat this month, though a price increase could emerge late in this first quarter. Prices typically go up in the second quarter, when demand normally surges.

Contributing factors: PET tabs have followed feedstock prices downward nearly penny for penny. Paraxylene and ethylene glycol were both down 10¢ to 12¢/lb through November and were expected to fall a bit lower in December—erasing any profit margin for PET suppliers.

According to Michael Dewsbury, RTI’s global business director for PET, demand for PET in 2008 was down from the previous year, but he is “relatively optimistic” that 2009 will be flat or better. “The key question is: when will the economy improve? In the past, we thought that the soda and water bottle markets were recession-proof. This does not seem to be the case now, as consumers are cutting back.”

Supply/demand balance signals a 10% improvement in resin capacity utilization rates for 2009. Permanent shutdowns of PET resin capacity by Invista and Wellman already equal the 800 to 900 million lb of new capacity that will be brought on stream by Indorama’s AlphaPet subsidiary in Decatur, Ala., at the end of this year. This new capacity, added to the 500 million lb at StarPet’s existing site in North Carolina, would make Indorama the leading PET supplier in North America.

 

Acrylic Resin Made from Renewable Raw Materials

Acrylic has joined the growing ranks of plastics being made from renewable sources. New Altuglas Rnew from Altuglas International in France (U.S. office in Philadelphia), is a PMMA grade containing 20% of carbon derived directly from biomass. It has properties comparable to conventional PMMA grades produced entirely from “fossil” carbon.
(800) 523-1532 • www.altuglas.com
 

Market Prices Effective Mid-Dec A

 
 
 RESIN GRADEb¢/LB¢/CU INc 

 ABS 

  

  
 
 MED IMPACT   95 - 115     359 - 434    
 HI IMPACT   100 - 135     378 - 510    
 X-HI IMPACT   110 - 150     415 - 567    
 HI HEAT   95 - 130     359 - 491    
 PIPE   95 - 105     359 - 396    
 SHEET   99 - 115     374 - 434    
 TRANSPARENT   134 - 205     506 - 774    
 FITTINGS   94 - 115     374 - 434    
 PLATING   134 - 205     506 - 774    
 FLAME RET   129 - 145     487 - 548    
 STRUCT FM   92 - 102     347 - 385    
 10% GLASS   134 - 145     506 - 548    
 30% GLASS   129 - 141     487    
 ABS/PC ALLOY   154 - 185     532 - 699    
 ABS/PVC ALLOY   139 - 144     525 - 544    
 ABS/NYLON ALLOY   199 - 355     752 - 1341    

 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   1205 - 1730     80.7 - 115.8    
 FEP   971 - 1470     74.8 - 113.2    
 PFA   1550 - 2520     120 - 195    
 PTFE   500 - 950     33.5 - 63.6    
 PVDF   730 - 1100     47 - 70    

 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   650 - 750     24.3 - 28    
 30% GLASS   NAd - NAd     NAd - NAd    
 40% GLASS   NAd - NAd     NAd - NAd    
 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   166 - 182 Prices Went Down 
  7.9 Prices Went Down 
 
 20% GLASS   172 - 190 Prices Went Down 
  8.2 Prices Went Down 
 
 30% GLASS   173 - 217 Prices Went Down 
  9.3 Prices Went Down 
 
 EXTRUSION   140 - 180 Prices Went Down 
  7.7 Prices Went Down 
 
 BLOW MOLD   145 - 185 Prices Went Down 
  7.5 Prices Went Down 
 
 STRUCT FOAM   144 - 181 Prices Went Down 
  7.8 Prices Went Down 
 
 20% GLASS   230 - 255 Prices Went Down 
  11.0 Prices Went Down 
 
 FR   161 - 197 Prices Went Down 
  8.5 Prices Went Down 
 
 CD   130 - 195 Prices Went Down 
  8.4 Prices Went Down 
 

 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)   67 - 71 Prices Went Down 
  3.4 - 3.6 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    

 POLYESTER THERMOSET 

  

  
 
 G-P ORTHO   161 - 171     NAd    
 ISOPHTHALIC   185 - 200 Prices Went Down 
  NAd    
 BIS-A   220 - 240 Prices Went Down 
  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   53 - 55     1.8    
 INJECTION   55 - 57     1.8 - 1.9    
 LID RESIN   57 - 59     1.9    
 LINER   55 - 57     1.8    
 CLARITY   51 - 53     1.7 - 1.8    
 EXTRU COATG   56 - 58     1.8 - 1.9    
 BLOW MOLD   58 - 60     1.9    

 LLDPE, BUTENE BASED 

  

  
 
 G-P MOLDING   50 - 52     1.7    
 LME 30-DAYj   19.7 Prices Went Down 
  0.6 Prices Went Down 
 
 FILM   55 - 57     1.8 - 1.9    
 ROTOMOLD   52 - 54     1.7 - 1.8    

 LLDPE, HAO-BASED 

  

  
 
 G-P MOLDING   53 - 55     1.8    
 LID RESIN   63 - 65     2.0 - 2.1    
 LINER FILM   56 - 58     1.8 - 1.9    

 HDPE 

  

  
 
 G-P INJ MOLD   53 - 55     1.8 - 1.9    
 FILM   60 - 62     2.1    
 BLOW MOLD   61 - 63     2.1 - 2.2    

 HMW-HDPE 

  

  
 
 BLOW MOLDING   57 - 59     1.9 - 2.0    
 FILM   58 - 60     2.0    
 PIPE   65 - 67     2.2 - 2.3    

 UHMW-PE 

1.22 - 1.52   

4.1 - 5.1   
 

 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   48 - 50     1.6    
 LME 30-DAYj   29.8 Prices Went Down 
  1.0 Prices Went Down 
 
 EXTRUSION FIBER   46 - 48     1.5 - 1.6    
 PROFILES   54 - 56     1.7 - 1.8    
 RANDOM COPOL          
 BLOW MOLDING   52 - 54     1.7    
 FILM   52 - 54     1.7    
 INJECTION   51 - 53     1.6 - 1.7    
 IMPACT COPOL          
 MED IMP   62 - 64     2.0 - 2.1    
 HI IMP   64 - 66     2.1    

 POLYSTYRENE (RAILCAR) 

  

  
 
 G-P CRYSTAL   61 - 67 Prices Went Down 
  2.3 - 2.5 Prices Went Down 
 
 HI HEAT   64 - 69 Prices Went Down 
  2.4 - 2.6 Prices Went Down 
 
 HIPS   71 - 77 Prices Went Down 
  2.7 - 2.9 Prices Went Down 
 
 SUPER HI IMP   77 - 82 Prices Went Down 
  2.9 - 3.1 Prices Went Down 
 
 FR   84 - 89 Prices Went Down 
  3.1 - 3.3 Prices Went Down 
 
 STRUCT FM (FR)   72 - 76 Prices Went Down 
  2.7 - 2.8 Prices Went Down 
 

 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   42 - 44 Prices Went Down 
  NAd    
 PIPE   41 Prices Went Down 
  NAd    
 FILM   47 - 49 Prices Went Down 
  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   231 - 250 Prices Went Down 
  NAd    
 HEAT & COR RES   256 - 263 Prices Went Down 
  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..