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Turnaround for PP, PS, PVC prices?

Suppliers of polypropylene, polystyrene, and PVC followed the lead of PE suppliers in attempting to reverse some of the price erosion that has taken place since mid-1995. Improved market demand appears to be on their side, even though PS and PVC prices were still falling as late as January.

Meanwhile, PET bottle-resin prices are predicted to soften in the second half of the year when added capacity catches up with soaring demand.


A 3[cents]/lb price hike on PP and TPO resins, apparently initiated by Montell Polyolefins, has been seconded by other major suppliers, including Union Carbide, Exxon, Quantum, Solvay, Fina, Phillips Sumika, Huntsman, and Aristech. Effective dates range from Feb. 1 for Montell to March 1.

Suppliers maintain that PP demand is up in the first quarter due to depleted customer inventories and rising exports. Off-grade product is said to be tight. Although Fina's new 400-million-lb/yr plant is now on stream, suppliers say most of it is already contracted for. However, a total of 8 billion lb/yr of new capacity is due on stream this year, most of it in the second half, and another 50 million lb will arrive in early 1997.


Even though PVC resin prices dropped another 1[cents]/lb in January, virtually all major suppliers announced Feb. 1 price hikes of 4[cents]/lb across the board for homopolymers. Suppliers expect domestic demand to increase throughout the year, and they say a surge is already evident in the first quarter. Starting this month, exports are also expected to increase. Resin capacity utilization rates are expected to go up to about 95%.


PS prices fell another 1-2[cents]/lb in January, but that didn't stop Dow Plastics from announcing a 4[cents]/lb [TABULAR DATA OMITTED] across-the-board increase on all PS, including ignition-resistant grades, for March 15. Huntsman and Fina announced similar hikes, and other major players were considering action at press time.

PS suppliers say January and February sales were very strong, and diversion of crude-oil supplies to make up for shortfalls in heating oil is said to be pushing up prices of benzene, the precursor for styrene monomer. February contract prices for benzene were 95[cents]/gal, up from 70[cents]/gal at the end of 1995. A 2[cents]/lb increase in February styrene monomer contract prices was being negotiated at press time.


Bottle-grade PET prices, which rose by 10[cents]/lb last year, are projected to remain fairly flat for at least half of this year and then to soften as new polymer and feedstock capacity comes on stream, easing tight supplies of both.

Suppliers concede that there will be plenty of new resin capacity by the second half of the year. About 1.2 billion lb of new capacity is due to come on stream in North America this year - of which about 1 billion lb will be in the U.S., much of it scheduled to arrive in the first half. Included are 220 million lb/yr from Nan Ya of Lake City, S.C., a new U.S. player in bottle-grade PET; 220 million lb from ICI; 200 million lb from Shell; 365 million lb from Eastman; and close to 300 million lb from Hoechst Celanese.

How soon all of this new polymer capacity becomes fully operational will depend on how quickly scheduled feedstock capacity additions are brought on stream. According to suppliers, feedstock expansions have been running about nine months behind polymer capacity increases.

Following global PET market growth of around 20% annually for the last few years, slightly more modest gains of 13-15% are projected for 1996. Capacity utilization, which reportedly exceeded 100% over the last couple of years, is expected to average above 90% this year.
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Title Annotation:Pricing Update; polypropylene, polystyrene, polyvinyl chloride
Author:Sherman, Lilli Manolis
Publication:Plastics Technology
Date:Mar 1, 1996
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