New hikes face price resistance.

In the dog days of August, attempts to raise polyolefin and styrenic resin prices seemed mostly bogged down in soft markets. An increase in ABS pipe grade was one exception. The fresh breezes of autumn may revive suppliers, efforts to raise prices, particularly in polystyrene.

POLYOLEFIN MAKERS TRY AGAIN

Polyethylene producers say they got a solid 3[cts.]/lb increase in August, after trying for several months. Now all but one producer have asked for 2[cts.]/lb more on all PEs across the board. But they may not get it, at least not right away.

One obstacle is Phillips 66, which posted its 2[cts.] hike for Oct. 1 instead of Sept. 1 like the others. "That pretty well guarantees an increase won't work at least until October," admits a disgruntled competitor. Other factors that could restrain PE prices are a slight softening of ethylene monomer prices and noticeably weaker export markets for LDPE in Europe and Asia. Already LDPE prices have weakened to the point that producers say the spread between LDPE and LLDPE is down to 3-4[cts.]/lb from 6[cts.]/lb earlier. If LDPE is a relative bargain, that puts pressure on LLDPE too.

Meanwhile, some PP producers are still hoping for the rest of the 12[cts.]/lb increase they've been trying to get for months. The big four PP producers--Amoco, Exxon, Fina and Himont--reportedly all got 1[cts.]/lb earlier and will ask for the second penny Sept. 1. (Only Exxon refuses to confirm this.) In their favor is tighter capacity utilization--89% vs. 85% a year ago--and lower inventories. But weighing against the increase is marketplace confusion.

Implementation of the earlier 2[cts.]/lb was so uneven that Amoco wrote customers that it would credit 1[cts.]/lb to anyone that actually paid 2[cts.] in the May 15-Aug. 31 period. Amoco insists that the second penny will take effect Sept. 1. Eastman hasn't changed its earlier announcement, so its 2[cts.]/lb hike still applies. Smaller producers have either said nothing or said they probably won't ask for the increase.

PS PRICES SOFTER

Prices of PS resins appear to have slipped over the last couple of months. Some suppliers indicate that price are near where they stood prior to industrywide price hikes issued earlier this year.

An increase of 3[cts.]/lb on all standard PS grades announced last month by Huntsman Chemical, to take effect September 1, languished for lack of support by other suppliers. Huntsman has reportedly rescinded that increase, which was attributed to a significant increase in transportation costs imposed by river flooding in the Midwest.

At least one PS supplier believes prices could firm up this month or next.

HIKES FOR PIPE-GRADE ABS

Monsanto Co. this month reportedly will match GE Plastics' 3[cts.]/lb price increase for pipe and fittings grades of ABS, which took effect early last month. At press time, Dow Plastics had confirmed industry reports that it would follow suit.

Even with these increases, market prices for domestic pipe-grade ABS remain in the mid- to high-60[cts.]/lb range for distributors and high-volume buyers. Pricing for natural pipe- and sheet-grade ABS continues to be highly competitive due to the influx of resins from Korea and Taiwan.

One domestic producer says distributors can purchase truckload quantities (40,000 lb) of imported natural pipe and sheet resins in the mid-60[cts.]/lb range. This range also may be available to some large-volume extruders. This source notes that one major drawback to low-priced imports is uncertainty over supply quantities and delivery schedules. Lead times for distributors purchasing truckload quantities of imported ABS usually run about six weeks.

Market pricing of imported natural ABS for most small- to medium-sized extruders and molders currently falls into the mid-70[cts.]/lb to mid-80[cts.]/lb range for truckloads, he says. Market pricing for precolored imports runs upwards of $1/lb tl. He adds that domestic ABS producers continue to remain competitive with the import pricing.