PS MAKERS ANNOUNCE PRICE HIKE

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AKRON, OHIO—Other polystyrene resin manufacturers have joined BASF Corp. in announcing 4 cent price increases effective July 1.

Dow Chemical Co. of Midland, Mich., Huntsman Corp. of Salt Lake City and Fina Chemical Co. of Dallas each made similar announcements last week. An industry source said Nova Corp. of Calgary, Alberta, and Chevron Corp. of Houston had followed suit, but officials at those firms could not be reached for confirmation.

Industry officials were optimistic about the increase attempt in spite of a failed round of 3 cent increases that dissipated in February. Recent additions of new capacity may be affecting the PS market by causing overcapacity, said David Vranesich, PS sales and marketing director of Mount Olive, N.J.-based BASF.

Vranesich pointed to Fina's 1996 PS expansion in Carville, La., and Chevron's soon-to-open Marietta, Ohio, expansion—as well as BASF's pending styrenic copolymer works in Altamíra, Mexico—as examples of new capacity that may be influencing pricing.

Vranesich added that PS margin levels have become ``totally unacceptable.'' Huntsman PS marketing director Bill Brengel agreed, saying the increase is ``purely margin-related.''

``There's a general oversupply position with some excess inventory,'' he said. ``We're not making anything because of the costs associated with producing polystyrene and styrene monomer.''

Brengel said BASF's announced closings of two small PS plants in Holyoke, Mass., and Santa Ana, Calif., ``add a little backbone to the price increase by suggesting the severity of the situation.''

Vranesich said the closings and price increase were not related. He said the closings were a result of smaller plants being replaced with ``world-scale'' facilities. The combined annual capacity of those plants is 155 million pounds.

The industry is still recovering from a period in which prices fell too far too fast, said Bob Koaches, Dow Chemical's product marketing manager.