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New round of PVC price hikes.

New Round of PVC Price Hikes

Just as the last round of industrywide price increases for PVC suspension resins began to take hold, a new round was announced by almost all major suppliers. Tight supplies and continued strong demand are blamed for the 1-2^/lb hikes set for May 1.

Meanwhile, several industry sources are projecting a decline in unsaturated polyester resin prices as early as this quarter, as demand in primary markets has dropped considerably and styrene monomer prices are expected to soften.


The latest increases for PVC suspension grades were initiated by Vista Chemical Co. and quickly supported by almost all other major suppliers. Vista called for a 2^/lb across-the-board price hike effective May 1, as did BFGoodrich, Shintech, Borden Chemicals, Georgia Gulf, and Air Products & Chemicals. Occidental Chemical, however, increased prices by just 1^/lb.

Some suppliers have already indicated they may have to match Occidental's new prices more closely in order to remain competitive. In the March 1 round of hikes, when Occidental also issued a price increase essentially 1^/lb lower than the rest, other suppliers were forced to implement 1^/lb discounts or temporary voluntary allowances (TVA's) off their originally announced 3^/lb hikes.

Driving up prices are tight supplies coupled with continued strong demand, say suppliers, and buyers contacted agree. "We're still having a heck of a time getting material," says one processor. On the other hand, many PVC buyers stocked up on inventory during the first quarter in anticipation of the traditional busy period--March through June. As a result, some industry sources say they expect demand to slow through this quarter. This, along with the 1.5 million lb of new capacity due on-stream later in the year, could well result in softer prices for PVC.



Lower prices may be in store for unsaturated polyester resins sometime this quarter if styrene monomer prices start to decline as expected and slumps in the resins' key markets continue.

Major suppliers concede that there is definite downward pricing pressure. "Some price drops in unsaturated polyester resins can be anticipated depending on when and how much styrene monomer prices slide during the second quarter," says a source at one supplier. Another points to slowed growth in primary markets: "The marine industry, for one, continues to be in a slump." He adds that this market has been hard hit by environmental regulations--particularly those concerning styrene monomer emissions.

While decreases are possible, suppliers say they will aim to keep prices as stable as possible, since profit margins have been very tight for quite some time. In addition, price pressure from another raw material, phthalic anhydride--recently hiked industrywide by 1-1/2-2^/lb--will serve to prevent any dramatic drops, suppliers say.


* PET: Sources at recyclers say that demand for recycled PET continues to be twice as high as available supply, which is serving to keep prices firm. Interviews with buyers and sellers of recycled PET resin have yielded the following prices: crystallized clear PET in pellet form, 44-49^/lb; clear flake material, 35-40^/lb; green flake material, low 30^/lb range.

* HDPE: At the end of the first quarter, prices for recycled HDPE resin, both pelletized and regrind, were reported stable. PE recyclers indicate continued strong demand for recycled HDPE will keep prices firm for now. Current prices for pelletized material are quoted between 30-36^/lb, depending on quality and end use. Regrind is still going for 18-22^/lb, with extrusion grades on the lower end and injection grades on the higher end. Recyclers say some price erosion could take place later in the year. "The current price of pelletized reprocessed HDPE is simply too high for the long run."

* L/LDPE: Recycled L/LDPE prices were softer at the end of the first quarter. Recyclers indicate that foreign competition is the reason. "There's a lot more material around and we're all price cutting," says one source. Whereas prices for L/LDPE regrind were quoted at an average of 21^/lb late last year, current quotes are between 16-18^/lb. Reprocessed and/or pellet form L/LDPE is selling between 25-30^/lb, down from about 5^/lb in late 1989.
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Title Annotation:polyvinyl chloride
Author:Sherman, Lilli Manolis
Publication:Plastics Technology
Date:May 1, 1990
Previous Article:Sizing up coordinate measuring machines.
Next Article:Degradables continue to lose favor.

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