PE, PP, PS increases take hold.

Polyolefin suppliers aim to fully implement their most recent rounds of price increases by this month. Spurred by higher monomer costs and aided by surging demand, they appear to be succeeding in raising prices 5[cents]/lb across the board on PE resins and 3[cents]/lb on PP. The same is true of 6-12[cents]/lb PS price increases.

PE PRICES PUSH HIGHER

LL/LDPE and HDPE resin prices went up 4[cents]/lb across the board with the September 1 round of price hikes. Customers with 30-day protection saw those increases October 1. Similarly, the October 15[cents]/lb increases were expected to be fully in place this month. Even though it looks like there won't be another price hike this year, there is a strong likelihood that one could emerge early in the first quarter of 1995.

Inventory levels of ethylene feedstock are at a historic low. Several plant maintenance turnarounds have been delayed to first-quarter '95 in response to recent unplanned outages (see PT, Oct. '94, p. 71). "Ethylene suppliers need to build inventory. We foresee the supply situation continuing to be difficult at least through the first half of 1995," says a leading PE supplier with its own ethylene production.

PE inventory levels are also very low, and some suppliers are reported to have no inventory at all. Most have had customers on some type of "sales control." Notes one major PE supplier, "Industrywide plant operating rates are above 95-96%. In practical terms, suppliers are making all the resin they can--subject to feedstock availability."

PP: NO RELIEF HERE, EITHER

PP suppliers are also looking to secure their last round of price hikes this month. Most issued increases of 3[cents]/lb, effective October 1. Amoco Chemical issued a similar increase with a November 1 start date.

"We are implementing the increase as we speak," said a leading supplier in mid-October. Strong market demand has helped suppliers push through higher prices. "September was a record month and October is shaping up the same way. We are still looking at growth in domestic consumption of 13-14% over 1993," this source reports.

In addition to a tight supply/demand balance, price pressure from propylene monomer has continued. Propylene prices moved up by 1[cents]/lb in September to 17.75[cents]/lb for polymer-grade material, and producers were aiming for another 1[cents]/lb in October. Says one resin supplier, "Propylene is certainly hard to get your hands on. But the strong resin demand and the fact that we were so badly off [for profits] for so long is driving these increases."

With PP plant utilization now estimated in the mid-90% range and resin inventories drawn down to 30-33 days as compared with 43-48 days in recent years, additional resin price hikes could well be in the offing.

PS: FR GRADES CATCHING UP

PS suppliers appear confident they will be able to implement their latest round of price hikes, which went into effect October 15. For standard and specialty grades, suppliers are aiming for 6[cents]/lb, having already implemented increases of 4[cents] in September. This latest hike is expected to be in place before year's end.

Suppliers that also offer ignition-resistant PS grades are looking to implement a total of 12[cents]/lb (4[cents] from September plus 8[cents] from October) on those materials, as prices failed to move in September. "By the first of the year, when many contracts are renewed, we expect most of that increase to be fully in place," says one supplier.

UNSATURATED POLYESTER HIKE

At press time, an unsaturated polyester price hike appeared on the horizon. Reichhold Chemicals' Reactive Polymers Div. announced increases of 2-3[cents]/lb for its polyesters, effective November 1. Look for a follow-up with more details next month.