Although export sales inched back slightly in June, polypropylene and PVC producers said last week they believe their sales remain strong enough to support additional price increases. Meanwhile, polyethylene producers also said they expect continued strong sales to support proposed price increases.
Dow Chemical Co. of Midland, Mich., announced another 5 cent increase, effective Sept. 1, for all grades of PE.
A fire July 28 at Lyondell Petrochemical Co.'s facility in Channelview, Texas, crippled that facility's ethylene monomer and propylene monomer production. The plant is not scheduled to be back in full production until mid-August or early September.
Lyondell is one of the largest merchant producers of ethylene, with 3.8 billion pounds of production capacity, and analysts said last week the fire and ensuing problems may remove any possibility of a price drop for ethylene monomer.
With current tight conditions for ethylene and PE, Lyondell's problem could provide a boost for the 5 cent-per-pound price increase that PE makers have proposed for Aug. 1. That increase initially was proposed for July 1, but was postponed for 30 days.
Last week, four buyers said their suppliers told them those increases for PE would be effective immediately Aug. 1.
Three PP producers contacted last week said they are continuing to operate under sold-out conditions, and a 3 cent price increase is rolling through the market.
While domestic demand for PP resin continues at high levels, producers acknowledged that export sales declined slightly in May and June from record levels in March and April.
Two buyers contacted July 30 said they believed the decline in export sales would help to swell domestic supplies, causing prices to drop. But resin producers said they expect prices to remain strong at least through September, when new resin capacity is put into production at Phillips Sumika Polypropylene Co. and Solvay Polymers Inc. in Houston, and at Epsilon Products Co. in Marcus Hook, Pa.
PVC suppliers said their sales in the first half of this year were so good that even with modest sales in the second half of the year, 1996 will be a near-record year.
Industry reports indicated that export sales of PVC increased 8.3 percent in 1996 compared with 1995. Export sales declined slightly in June, but suppliers said they believe domestic sales remain strong enough to provide support to the 2 cent-per-pound increase they announced for Aug. 1.