PP & PS Prices May Rise
Polypropylene and polystyrene prices were moving upward in the last month, though polyethylene was relatively flat and PVC was still soft.
Polypropylene and polystyrene prices were moving upward in the last month, though polyethylene was relatively flat and PVC was still soft. Demand is said to be steady, but not stellar. “Generally, processors are buying as needed, and are likely to be able to do that through this month, particularly in the case of polyethylene. Although production is stable, there has been no strong order placement,” says Cindy Bryan, director of market research at resin purchasing consultant Resins Technology Inc. (RTI), Fort Worth, Texas.
There are also indications of resin inventory build-up—material that was slated for export to Asia, according to Bryan. While polyolefin suppliers lowered plant operating rates last fall to slow burgeoning inventory accumulations, this “orphaned” export material is likely to be redirected to the domestic market, probably at more attractive pricing.
PE prices stable for now
Polyethylene prices remained flat last month, and suppliers pushed back their 6¢ to 7¢/lb increases from January to this month. Meanwhile, the London Metal Exchange (LME) short-term futures contract for February in g-p blown film butene LLDPE sold at 50.3¢/lb, down from January’s 52.2¢.
Contributing factors: Demand for PE remains steady, though undramatic, but there has been a downward push from ethylene monomer pricing. December monomer contracts dropped 3¢ to 41.5¢/lb. Although there are some January contract price nominations for increases of 2¢ to 3¢, spot ethylene prices have dropped to 32¢/lb, and even lower bids have been posted, according to RTI’s Bryan.
PP prices up
Polypropylene prices in January moved up 2¢ to 3¢/lb, a partial implementation of 5¢ hikes slated for January. At press time, Basell issued a price hike of 5¢/lb for Feb. 1, and two other suppliers were rumored to be doing the same. LME’s February futures contract for g-p injection-grade homopolymer sold at 50.3¢/lb, down from January’s 53.4¢.
Contributing factors: Overall demand in most markets is said to be good, with the exception of fibers. Suppliers concede that the recent demand surge was partly due to an inventory correction, as processors had been working off inventories through the latter part of last year. Resin plant utilization rates were scaled back to around 85% in November, and are still below 90%. Supplier inventories are reportedly lower than before.
Propylene monomer prices are once again making themselves felt, as January contract nominations were up 2.25¢/lb to 42.75¢. Monomer supply has been tight and is likely to remain so for a couple of months, since at least one major refinery is down for maintenance this month.
PVC tabs slip again
PVC resin prices were weaker in December than anticipated, dropping 2.5¢ to 3¢ instead of the expected 2¢. In mid-January, PVC appeared to be down another penny.
Contributing factors: PVC producers’ operating rates in December were the lowest in five years—67% according to the American Plastics Council’s preliminary numbers. Processors say orders are way down for PVC windows, siding, and other building products. The bright spots are solid demand for white municipal pipe and foamed trim board, a new wood-replacement market.
PS rises 3¢
Polystyrene resin producers all announced a 3¢/lb increase for Jan. 1, which appeared to be taking hold despite processors’ resistance. For resin makers, it recoups 3¢ lost in December. They then announced hikes of 3¢ or 4¢/lb for Jan. 15, but industry observers are skeptical about their chances of success. Meanwhile, EPS makers are expected to push through the 4¢ hike announced in mid-January.
Contributing factors: When the Jan. 1 PS price increase was announced in December, contract benzene prices were down to $3.32/gal. (Benzene is a key feedstock for styrene monomer.) Benzene contracts for January were up again to $3.74, but resin demand is still slow, especially for HIPS in durable goods, after a very weak November and December. EPS demand, however, is good.
Dow hikes ABS, SAN
Blaming benzene prices and their carryover effect on styrene monomer, Dow Chemical raised prices of ABS and SAN by 7¢/lb on Feb. 1.
Market Prices Effective Mid-Jan A |
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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.. |
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