PP SUPPLIERS ANNOUNCE 3 CENT PRICE INCREASES

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AKRON, OHIO—Several major polypropylene makers announced 3 cent price increases with effective dates ranging from May 1 to July 1.

The round of increases is the second to hit the PP market this year, following a 3 cent March hike that was partially derailed by resin buyers.

Montell Polyolefins of Wilmington, Del., was the first to bolt out of the gate with a hike effective May 1. Exxon Chemical Co. of Houston followed suit May 23. Union Carbide Corp. of Danbury, Conn., and Huntsman Corp. of Salt Lake City, announced similar increases for June 1 and July 1, respectively. Millennium Petrochemicals Inc. of Cincinnati announced a 3 cent increase for July 1.

Other PP firms, including Dow Chemical Co. of Midland, Mich; Amoco Chemical Co. of Alpharetta, Ga; Rexene Corp. of Dallas; and Epsilon Products Co. of Marcus Hook, Pa., have not announced increases, according to officials.

Rich Holtkamp, Montell's sales director for consumer products, said his company announced the hike because it ``didn't recover true market value'' in the first increase. According to Holtkamp, Montell only saw 1-2 cents of that first increase go through.

Huntsman officials said they only saw 11/2-2 cents of the March increase. Other manufacturers said they saw similar success rates for the earlier attempt.

Several industry officials said the second round of increases is an attempt to rebuild margins lost in the final quarter of 1996, but some also said it may be an attempt to offset the opening next month of Exxon's Baytown, Texas, production line. The line will produce 500 million to 600 million pounds of PP annually.

Holtkamp admitted Exxon's new capacity is a factor in the market, but he said it did not affect Montell's pricing decision.

``We're not reacting either way,'' Holtkamp said. ``New capacity never comes on in the way people expect it to happen. In a macro-sense, there will be more polypropylene on the market, but in a micro-sense, you probably won't see it immediately.''

Huntsman delayed its increase until July to see what effect the Exxon plant will have, said Greg Osterholt, PP marketing director. The date also coincides with the auto industry's price announcements for next year, he said.