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Prices will hold--and may rise.

Last year saw significant increases in prices of commodity thermoplastics, driven by unprecedented energy and feedstock costs. Moreover, a robust export market fed by the weak U.S. dollar offset lackluster domestic demand, keeping resin supplies tight to balanced. One brighter spot was the significant drop in imports of finished goods, which is expected to continue. All in all, the majority view is that--barring a recession--prices will remain flat or could rise in the first half, though there is some chance of price relief in PVC and perhaps PP.

CONTINUED PRESSURE ON PE PRICES

Polyethylene prices rose a total of 24 cents to 26 cents/lb in 2007, leaving them just 5 cents below their all-time high in the fall of 2005. Resin makers have pushed back their 6 cents increase announced for Dec. 1 and the 5 cents hike for Dec. 15. Meanwhile, the London Metal Exchange (LME) short-term North American futures contract for January in blown film butene LLDPE was 62.6 cents/lb, up from December's 60.8 cents.

Contributing factors: Although price pressure from ethylene monomer showed signs of abating in December, other factors are expected to keep pushing PE prices upward, through at least the first quarter. Higher oil prices are one key factor. The other, driven by the weak dollar, is continued strong export demand from Europe and China. The latter is poised to play a bigger role due to a serious shortage in diesel fuel due to high crude oil prices, which has cut Chinese ethylene production by 10%, thus curtailing PE resin production. "We don't see any significant relief in resin prices until after the first quarter. It will be an export-driven first quarter," says Mike Burns, global business director of PE at resin purchasing consultant Resin Technology, Inc. (RTI), Fort Worth, Texas.

Says a source at one major PE supplier, "There is no question that these higher prices continue to put a lot of pressure on our customer base. The key is to manage their business well, which includes not getting into contracts with their customers where they are locked into pricing."

Though high exports lifted overall demand for PE 4.5% through the third quarter, domestic demand was flat if not a bit lower than in 2006. Domestic demand for 2008 is cautiously projected to be flat or a slight uptick. Plant operating rates in 2007 were at 95% through September, and dropped to 92% by year's end. For 2008, plant operating rates are projected to remain in the same range.

PP PRICES UP

Polypropylene prices in 2007 rose a total of 18 cents/lb through November. Suppliers' 6 cents increase for Dec. 1 was pushed back to January, even though an additional hike of 3 cents/lb was announced for Jan. 1. Meanwhile, LME's January North American futures contract for g-p injection-grade homopolymer sold at 65.5 cents/lb, up from December's 64.6 cents.

Contributing factors: The main driver in PP resin prices has been the unprecedented propylene monomer tabs. November monomer contract prices rose a whopping 7.25 cents, reaching a record high of 61.5 cents/1b--10 cents higher than even in the fall of 2005, following supply disruptions caused by Hurricane Katrina. December contract bids ranged from 3 cents to 9 cents/1b and will probably settle somewhere in the middle. "High monomer prices have started to affect resin demand, so that exports, which have been the saving grace for PP resin suppliers, are not as attractive for suppliers," says Scott Newell, director of client services for PP at RTI.

Late last year, Newell and other industry sources saw a growing gap between PP resin prices for prime and secondary resin markets, which had been very close all year. Still, no one is projecting any price relief in this quarter. A big factor is shutdowns of older PP capacity early in the year, and questions about how soon the new replacement capacity will actually come on stream. One major supplier notes that PP supply could be tight through at least the first quarter.

Shutdowns include Dow's 500-million-lb plant in Louisiana, two Basell Canadian plants totaling 900 million lb, and Ineos' 450-million-lb unit in Texas. Upcoming new capacity includes Basell's restart of 450 million lb in Texas; debottlenecking by Total and Formosa, each at 100 to 200 million lb/yr; and 900 million lb of new capacity from the Basell/Indelpro joint venture in Mexico. According to RTI's Newell, the latter will reduce U.S. PP exports to Mexico, which have averaged 110 million lb/month.

Says Newell, "I don't see any major reduction in resin prices if crude oil prices stay in the $85 to $95/barrel range. Also, PP supply has been very tightly balanced. There is some potential for lower PP prices if prices of propylene monomer drops 3 cents to 5 cents." On the other hand, one leading supplier holds out hope for some price relief from lower monomer prices and lower PP exports. Industry sources generally project that PP prices will be somewhat higher than last year, barring a drop in crude oil prices. Newell from RTI sees PP prices moving up or down within a 10 cents window.

Domestic PP demand in 2007 grew only 1% to 2%. Similar growth is expected this year by most industry sources. But one major supplier thinks growth could return to more typical levels of 3% because the weak dollar has made finished-product imports more costly.

FLAT PRICES AHEAD FOR PVC

In November, PVC producers say they implemented 4 cents of the 6 cents/lb increase they asked for, but one published chemical price index says they got only 3 cents. Resin makers issued a TVA for the remaining 2-3 cents in December. January contract prices were expected to slip lower. Export prices were also dropping.

Contributing factors: Domestic PVC demand for 2007 was expected to end the year off about 6% from 2006. Total demand, however, could be down only 3%, buoyed by strong exports, which were up about 37%. Industry sources attribute export demand primarily to the weak dollar.

The market expects next year to be down in the first half, and then to pick up slightly in the second half, unless a recession strikes. Shintech told customers it will bring its new Louisiana plant up in the first quarter, but they expect it in the second quarter or later. Georgia Gulf plans to shut temporarily its 450-million-lb plant in Sarnia, Ont.

PS WILL STAY HIGH

In November, polystyrene producers asked for a 4 cents /lb increase, of which they got 2 cents and delayed 2 cents. At mid-month, December prices were flat, but not eroding. Meanwhile, Chevron and Ineos/Nova announced 4 cents/1b increases for Jan. 1. The narrowed price premium for PS over PP, now only about 4 cents/1b vs. as much as 16-18 cents previously, isn't expected to last long.

Contributing factors: PS usage was down about 4.7% in 2007. With EPS included, demand was down 3.5%. If there is no recession, PS could expect modest growth this year. But PS producers already see a recession in domestic durables like refrigerators.

Expect more plant closures as suppliers shed older capacity. Ineos Nova, for example, will shut down this month its 220-million-lb Belpre, Ohio, plant, which represents 12% of its North American PS capacity. Last month, the company shut down its Montreal plant, which produced 120 million lb. Meanwhile, the joint venture of Dow and Chevron Phillips, to be called Americas Styrenics, is expected to start up in this quarter with headquarters in Houston.

LEARN MORE ONLINE

For more pricing news, see this month's Pricing Update on the web at www.ptonline.com/current.html

By Lilli Manolis Sherman & Jan H. Schut, Senior Editors
MARKET PRICES EFFECTIVE MID-DECEMBER (a)

 cents/Cu.
Resin Grade (b) cents/Lb. In (c)

ABS
 MED IMPACT 84-95 3.2-3.6
 HI IMPACT 89-125 3.3-4.7
 X-HI IMPACT 99-140 3.7-5.3
 HI HEAT 89-110 3.3-3.8
 PIPE 89-100 3.7-3.8
 SHEET 94-110 3.5-4.2
 TRANSPARENT 129-200 5.6-8.8
 FITTINGS 89-110 3.5-4.3
 PLATING 160 6.0
 FLAME RET 124-140 4.6-5.9
 STRUCT FM 87-97 3.2-4.3
 10% GLASS 129-140 4.8-5.6
 30% GLASS 124-136 4.6-6.3
 ABS/PC ALLOY 149-180 5.5-6.8
 ABS/PVC
 ALLOY 134-139 5.0-5.2
 ABS/NYLON
 ALLOY 194-350 9.0-16

ACETAL
 HOMOPOL 151-172 7.7-8.7
 20% GLASS 171-235 8.7-11.9
 COPOLYMER 144-160 7.3-8.1
 25% GLASS 171-245 8.7-12.4

ACRYLIC
 G-P 117 5.0
 IMPACT 192 8.2

ACRYLONI-TRILE
COPOL
 EXTRUSION 78-110 3.3-4.7
 INJECTION 130-191 5.4-7.9

ALKYD 65-74 4.9-5.5

CELLULOSICS
 ACETATE 187 8.6
 CAB 189 8.2
 CAP 189 8.2

DAP (G-P) 251-497 16.3-34.7

EPOXY
 G-P RESIN 116-126 NA (d)
 COMPOUNDS
 C/B/T (e) 123-166 9.4-12.9
 R/C/D (f) 208-271 15.3-20.1
 SEMI-
 CONDUCTOR
 NOVOLAC 193-228 13.1-15.9
 ANHYDRIDE 188-268 13.9-19.2

EVA
 INJECTION 69-71 2.3-2.4
 FILM
 EXTRUSION 67-69 2.3

EVON 330 15
 CTFE

FLUOROPOLYMER
 CTFE 5000-6000 385-462
 ECTFE 1200-1680 90.7-120
 ETFE 1155-1680 70.7-102.8
 FEP 971-1470 74.8-113.2
 PFA 1550-2520 120-195
 PTFE 450-900 34.8-69.7
 PVDF 660-1000 49.9-75.6

IONOMER
 PACKAGING 127-166 4.3-6.0
 INDUSTRIAL 150-244 5.0-8.3

LIQUID-CRYSTAL
POLYMERS
 INJECTION
 MIN FILLED 690-1035 44.2-72.1
 GLASS FILLED 695-895 40-52
 CARBON FILLED 1700-2000 83.2-138.6
 UNFILLED 1000-1200 58-70
 EXTRUSION
 UNFILLED 1200-2200 60.5-110.9

MELAMINE
COMPOUND 90-94 5.5-5.6
MELAMINE/
PHENOLIC
COMPOUND 75-83 4.5-5.0

NYLON
 TYPE 6 139-159 5.7-6.5
 MIN FILLED 131-144 5.4-5.9
 30% GLASS 148-173 6.0-7.0
 TYPE 66 153-168 6.3-6.9
 MIN FILLED 151-159 6.2-6.5
 30% GLASS 142-192 5.8-7.9
 TYPE 69 250-276 9.7-10.7
 TYPE 6/10 286-313 12.4-13.6
 TYPE 612 400 15.3
 30% GLASS 309-311 14.7
 40% GLASS 309 14.7
 TYPE 46 350 17.6
 TYPE 11 329-341 13.6-14.1
 30% GLASS 331-350 15.0-15.8
 40% GLASS 347-360 17.7-18.5
 TYPE 12 318-341 12,1-13.0
 30% GLASS 327-350 14.7-15.8
 50% GLASS 299-340 15.6-17.8
 TRANSPARENT
 AMORPHOUS 247-360 10.3-15.0

PHENOLIC MOLD
COMP 75 3.8
 REINFORCED
 GRADES 105-268 6.1-16

POLYAMIDEMIDE (g)
 UNFILLED 2750 148.5
 30% GLASS 2500 135
 30% CARBON FIB. 3500 185

POLYARYLATE 200-280 8.8-12.3
POLYARYLSULFONE 440 21.8

POLYBUTYLENE
 G-P 94-96 3.1
 FILM 88-91 2.9
 PIPE
 COLD WATER 116-120 3.9-4.0
 HOT WATER 162-166 5.5-5.6

POLYCARBONATE
 INJECTION 171-182 7.4-7.9
 20% GLASS 177-190 7.6-8.2
 30% GLASS 178-217 7.6-9.3
 EXTRUSION 145-180 6.3-7.8
 BLOW MOLD 150-185 7.0-7.5
 STRUCT FOAM 149-181 6.4-7.8
 20% GLASS 235-255 10.1-11.0
 FR 166-197 7.1-8.5
 CD 135-195 5.8-8.4

POLYESTER (TP)
PBT TYPE
 UNFILLED 145-150 6.8-7.3
 HI-IMP 165-175 7.8-8.3
 30% GLASS, FR 195-215 9..2-10.1
 STRUCT FOAM 159-165 NA (d)

PET
 BOTTLE
 (RAIL CAR) 78-80 4.0
 MOD PET
 30% GLASS 132-143 7.4
 55% GLASS 148-155 9.8
 30% GLASS,
 FLAME RET 147-157 9.2
 PETG COPOL 114-124 52-5.6

POLYESTER
THERMOSET
 G-P ORTHO 142-152 NA (d)
 ISOPHTHALIC 170-185 NA (d)
 BIS-A 205-225 NA (d)

POLYETHER-
KETONE (PEEK) 4400 231
 30% GLASS 3300 173

POLYETHERIMIDE 641-646 29.3-29.5
 30% GLASS 526-531 24.0-24.2

POLYETHER-
KETONE (PEK) 2950 130.1
 30% GLASS 2600 153

POLYETHER-
SULFONE 350-400 17.2-19.7
 30% GLASS 425-525 21-25.9

POLYETHYLENE
(RAIL CAR) LDPE
 G-P MOLDING
 & EXTRU 78-80 2.6
 INJECTION 80-82 2.6-2.7
 LID RESIN 82-84 2.7
 LINER 77-79 2.6
 CLARITY 76-78 2.5-2.6
 EXTRU COATG 81-82 2.6-2.7
 BLOW MOLD 83-85 2.7-2.8

LLDPE,
BUTENE-BASED
 G-P MOLDING 75-77 2.5-2.6
 FILM 77-79 2.6
 LME 30-DAY (i) 62.6 [arrow up]* 2.2 [arrow up]*
 ROTOMOLD 77-79 2.6

LLDPE,
HAO-BASED
 G-P MOLDING 78-80 2.4-2.5
 LID RESIN 88-90 2.7-2.8
 LINER FILM 81-83 2.5-2.6

HDPE
 G-P INJ MOLD 75-77 2.5-2.6
 FILM 84-86 2.8
 BLOW MOLD 85-87 2.8-2.9

HMW-HDPE
 BLOW MOLDING 82-84 2.6-2.7
 FILM 83-85 2.6-2.7
 PIPE 90-92 2.9-3.0
UHMW-PE 100-125 3.6-3.7

PPE/PPO-
BASED RESIN
 INJECTION 180 6.8
 20% GLASS (h) 283 12.3
 30% GLASS (h) 291 13.3
 EXTRUSION (h) 242 9.2
 STRUCT FM 231 NA (d)

PPS
 40% GLASS 450-520 27.0-31.2
 55% GLASS/
 MINERAL 345-420 22.7-27.7
 65% GLASS/
 MINERAL 270-315 18.9-22.1

POLYPROPYLENE
(RAIL CAR)
 G-P HOMOPOL
 INJECTION 81-83 2.6-2.7
 LME 30-DAY (j) 65.5 [arrow up]* 2.3 [arrow up]*

 EXTRUSION
 FIBER 79-81 2.5-2.6
 PROFILES 84-86 2.7
 RANDOM
 COPOL
 BLOW
 MOLDING 85-87 2.7-2.8
 FILM 85-87 2.7-2.8
 INJECTION 84-86 2.7
 IMPACT COPOL
 MED IMP 95-97 3.0-3.1
 HI IMP 97-99 3.1-3.2

POLYSTYRENE
(RAIL CAR)
 G-P CRYSTAL 86-92 3.2-3.4
 HI HEAT 89-95 3.3-3.6
 HIPS 87-92 3.3-3.4
 SUPER HI IMP 97-101 3.6-3.8
 FR 102-110 3.8-4.1
 STRUCT FM
 (FR) 105-108 NA

EPS
 UNMODIFIED 85-88 NA (d)
 MODIFIED 86-90 NA (d)

POLYSULFONE 650-750 29-33
 10% GLASS 799-875 36-39
 30% GLASS 699-775 31-35

POLYURE-
THANE (TP)
 ESTER TYPE 185-255 8-11
 ETHER TYPE 245-295 10.6-13

PU
ISOCYANATESI
 POLYMERIC
 MDI 125-145 NA (d)
 80/20 TDI 135-145 NA (d)

PVC RESIN
(RAIL CAR)
 G-P HOMOPOL 56-58 NA (d)
 PIPE 55 NA (d)
 FILM 61-63 NA (d)
 COPOLYMER
 FLOORING 69-74 NA (d)
 DISPERSION
 HOMOPOLY 81-87 NA (d)
 COPOLYMER 86-90 NA (d)
 CPVC PIPE
 COMPOUND 119 NA (d)

PVDC
 EXTRUDABLE 162 NA (d)

SILICONES
 MOLD. COMP. 581-640 381-393
 SPECIALTY GR. 891-3148 NA (d)
 SILICONE/
 EPOXY 339-343 225-228

STYRENE-ACRYLIC 108-112 3.7-4.0

SAN (G-P) 80-88 3.0-3.3

STYRENE MALEIC
ANHYDRIDE
 G-P 110-115 4.2-4.3
 HI IMP 130-140 4.2-4.5
 FR 175-183 6.7-7.0

TP ELASTOMERS
 OLEFINIC 70-76 2.4
 POLYAMIDE 300-350 10.9-12.7
 POLYESTER 200-310 8.8-13.6
 STYRENIC 83-237 2.9-8.3

VINYL ESTER
 COR RES 218-235 NA (d)
 HEAT & COR
 RES 243-248 NA (d)

KEY: Colored areas indicate pricing activity. An arrow (*)
indicates direction of price change. (a) Truckload, unless
otherwise specified. (b) Unfilled, natural color, unless otherwise
specified. (c) Based on typical or average density. (d) Not applicable.
(e) Novolac and anhydride grades for coils, bushings, transformers.
(f) Novolac and anhydride grades for resistors, capacitors, diodes.
(g) In quantities of 20,000 lb. (h) 19,800-lb load. (i) Prices include
benzene surcharge. (j) LME 30-day futures contract for lots of 54,564
lb.
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Title Annotation:your business: pricing update
Author:Sherman, Lilli Manolis; Schut, Jan H.
Publication:Plastics Technology
Date:Jan 1, 2008
Words:2462
Previous Article:CT scans see inside plastic parts.
Next Article:Trends favor injection molding.
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