By: Frank Esposito
January 31, 2013
AKRON, OHIO -- North American prices for polycarbonate and nylon resins traveled different roads in the fourth quarter of 2012, with PC prices climbing 3 percent and nylon prices declining by a similar amount.
The PC move equals a gain of 5 cents per pound on general-purpose grades used in injection molding. PC prices had dipped 4 percent in mid-2012, but rebounded as supply tightened and prices for benzene feedstock increased, market sources said.
Fourth-quarter PC supplies tightened as Sabic Innovative Plastics had a maintenance shutdown at its plant in Mount Vernon, Ind., and Bayer MaterialScience LLC did the same at its plant in Baytown, Texas. Those two plants account for almost 60 percent of North American PC capacity, according to IHS Chemical, a consulting firm in Houston.
In the benzene market, prices topped $5 per gallon for the first time in January, with contract prices settling at $5.16. Benzene prices now are up almost 23 percent since September. Spot benzene prices were falling in mid-January, possibly lessening the impact of that material on future PC pricing.
U.S. PC makers also benefited from increased export sales in the first seven months of 2012. Exports of PC from the U.S. grew 12 percent in that period, including an increase of almost 30 percent in PC exports to China.
Looking ahead, industry contacts said that PC demand could benefit from ongoing strength in the North American auto sector, and from a rebound in sales of appliances and electronic devices.
For nylon, the fourth-quarter decrease amounts to a drop of 6 cents for both nylon 6 and 6/6 resins. Although North American demand has improved as the number of auto builds has steadily increased to approach pre-recession levels, sources said that oversupply — particularly in nylon 6/6 — has served to keep prices down. Automotive uses account for 50 percent of North American nylon 6/6 demand and 35 percent of the region's nylon 6 demand, according to IHS.
Imports of nylon resin into the U.S. also increased 22 percent in the first seven months of 2012. Imports of nylon from Germany and Japan each grew more than 50 percent during that period. At the same time, exports of nylon from the U.S. to other countries fell by 3 percent in those seven months, causing more material to be available in the domestic market.
From 2012-17, global nylon operating rates should be relatively low at 60-70 percent, according to IHS, because of an abundance of capacity being added in China. North America leads the world in production of nylon 6/6, with a 41 percent market share. Northeast Asia is the largest nylon 6 producer, with 58 percent of global production.