In a metaphysical way, the pursuit of higher prices for polyethylene resins is inching forward. While more PE producers have announced their intentions to boost prices, their notices are being seen more as philosophical signs than as real threats - at least for the present.
Separately, market prices for PET bottle resins have declined 1-2 cents per pound in recent weeks.
In PE last week, Phillips 66 Co., Paxon Polymer Co., Mobil Chemical Co. and Chevron Corp. announced they intend to increase their prices for PE resins, while Quantum Chemical Co. told its customers it also intends to increase prices for its high density PE. Quantum previously told its customers it would increase prices for its low and linear low density PE resins.
The majority of the producers, including Dow Chemical Co., Solvay Polymers Inc., Union Carbide Corp. and Exxon Chemical Co., said they would increase their prices 5 cents per pound, with effective dates of either Jan. 1, Jan. 15 or Feb. 1.
Phillips said it would increase prices 3 cents per pound, effective Feb. 1, while Paxon said it would raise prices 3 cents per pound, effective Feb. 3.
Meanwhile, resin distributors said last week they continue to see plentiful supplies of secondary materials. Typically, supplies of secondary materials - the grades of near-prime, pencil-prime and wide-spec resins - melt away as supplies of prime resins become tight, and shortages of secondary materials are seen as indications that price increases are in the offing.
As a result, PE resin producers acknowledge they might not see a price increase until the second quarter.
Executives of several firms that produce PE said they view this round of price increase announcements as a preliminary step toward getting an increase this year. They said they hope this announcement will help reverse buyers' purchasing psychology - from expecting further price decreases, to being happy that prices remain the same rather than increasing.
The executives point out that prices for ethylene appear to be bottoming out, and that orders for PE began to pick up in December.
Producers are expecting significant growth in demand for PE this year and, if those expectations prove to be well-founded, they say there could be shortages of PE by the end of this year.
Separately, PET bottle resin producers saw a slight decline in demand in the fourth quarter of 1995, while new capacity has been put into production. Both buyers and suppliers said those facts combined to soften prices.
PET bottle resin suppliers acknowledged they are seeing tougher competition in the market, and that prices decreased by 1-2 cents per pound.
While no producers are expecting PET bottle resin prices to tumble, further capacity additions are expected this year, and several producers said prices could soften in the second half.