The heat is still on resin prices.

* Midsummer saw resin prices at a full boil, with many materials falling into a pattern of monthly increases of 3 cents to 7 cents/lb.

PE prices moving up

Polyethylene prices are on the move as suppliers aim to implement without delay their July 1 price hikes of 4 cents/lb. Prices had already moved up 5 cents in the May-June period, reversing the decline of 3 cents to 4 cents in March and April. In related news, DuPont raised tabs on its Elvax EVAs by 5 cents/lb on July 15.

Contributing factors: Suppliers attribute their actions to increased demand and tighter supplies. Data from the American Plastics Council indicate 4% to 5% higher PE consumption in the second quarter. Preliminary data for July indicates continued acceleration in demand growth, both in North America and abroad.

PP hike under way

Anew effort to raise PP prices was in progress at press time. Dow Polyolefins announced a 5 cents/lb increase and BP Amoco announced 3 cents/lb, both for Aug. 1. These moves follow the implementation of a 3 cents hike in June. PP resin prices this year have now moved up a total of 13 cents to 14 cents/1b.

Contributing factors: The new increase is attributed to continued strong demand and tighter supply and resin producers' need to restore operating margins to more acceptable levels. Suppliers' inventory levels are expected to be extremely tight for the balance of the year. PP plant operating rates are expected to approach 95%.

Demand for PP in May and June was 10% to 12% higher than in 2003. Overall growth for the first hall of 2004 is expected to be up 6%. Despite the traditional summer slowdown, suppliers project continued improvement in demand this year.

PVC pipe demand softer?

PVC resin producers say they were getting a penny more in July than in mid-June, despite signs of seasonal slackening of pipe demand. But some producers say the August penny increase won't stick.

Contributing factors: Some pipe producers are discounting inventory, a sign that prices are turning downward. Other pipe producers, however, are holding firm, saying demand is still strong.

Meanwhile, PVC compounders put through 3 cents/1b increases on compounds from June 1 to July 1. Compounders have been squeezed, especially in flexible PVC, where plasticizer prices were up 5 cents/lb in July on top of an 8 cents increase earlier in the year.

PS stays tight

Polystyrene producers put through a 4 cents increase in June and July (it was originally due in May). Nova led off a fresh round of increases with an announcement of a 4 cents hike Aug. 1.

Contributing factors: In mid-July, spot prices of benzene feedstock hit stratospheric levels of $3.75/gal, while contract prices for that month were $3.07/gal. Forward spot prices for August were at $3.50, a level that makes it more profitable to sell benzene than the derivative, styrene monomer.

Processors report that high prices are causing substitutions of paper for PS plates and PP for PS car cups. High energy prices have affected paper and PP too, but not as much as PS.

TPUs, polyesters, epoxies up

Dow Plastics raised TPU elastomers by 15 cents/lb on July 15 and BASF did the same on Aug. 1. Dow also raised Isoplast rigid engineering TPUs by 18 cents on July 15.

In addition, Dow hiked epoxies 8 cents to 10 cents/lb on Aug. 1. Dow cautioned that there is no relief in sight from continuing upward price pressures on epoxies from feedstock and energy costs and a tightening global supply/demand balance (all Dow's plants are operating at capacity). Another major epoxy producer, Resolution Performance Products, removed all price-protection mechanisms such as firm quarterly pricing, price caps, and price-increase delays.

There also seems to be no relief from the steady upward march of unsaturated polyester prices. At press time, Reichhold and Cook Composites said they would boost prices of resins by 7 cents/lb on Aug. 5 and 16, respectively. CCP would also hike gel coats 9 cents/lb. AOC will hike resins by 7 cents and gel coats by 9 cents on Aug. 16.