Market and seasonal pressures have pushed prices for a number of thermoplastic resins downward in recent weeks. Prices drifted down for ABS, PET, polypropylene, polystyrene, PVC, acetal and polycarbonate resins because of a variety of factors. Here is a rundown by resin:
ABS. Taiwanese and South Korean producers are attempting to make new inroads on North American ABS markets, and their efforts, combined with the labor contract strike at General Motors Corp. and seasonal declines in purchasing, increased competitive pressures on domestic ABS producers.
Prices have been stable for much of 1996, but buyers said they saw prices begin to slip by a penny or two since early September.
By last week, buyers said prices dropped a total of 3-4 cents for ABS across a wide number of grades.
Further, buyers said they were eyeing prices for feedstocks - butadiene has been stable through much of this year and styrene monomer prices have declined slightly and may drop further - as they continue to press for price cuts.
PET. While the free fall in prices for PET is over, producers said sluggish demand and abundant supply helped to push prices down by another 2 cents per pound in recent weeks.
PET prices fell 35 percent from January to September as producers put new capacities into production and as prices for feedstocks plunged nearly 55 percent.
Demand softened considerably in the same time period, making producers scramble for sales.
Polypropylene. Production increases at Epsilon Products Co., Solvay Polymers and Phillips Sumika Polypropylene Co. provided more resin to the market and stopped an attempt to boost
prices in October.
Epsilon and Solvay put their new capacities into production in September, and Phillips Sumika's capacity was started in mid-November.
The additions have helped to swell secondary markets for PP, and prices for prime grades have declined by 2 cents per pound.
Buyers said last week they were seeing lower prices on PP Polystyrene. As with ABS, buyers said they expect further declines in the prices for styrene monomer, and are using those declines to press for lower prices for polystyrene.
PS prices softened in October, and resin producers said they believe the softening was due to seasonal pressures as customers ended their preholiday production and as cold weather set in, and to the declining prices for styrene monomer.
The decline in prices for PS wiped out producers' gain from an increase of 2 cents per pound early this year.
PVC. The onset of cold weather and other seasonal factors slowed demand for PVC resins.
Buyers and producers said last week that prices have softened by 2 cents per pound since the end of September, and competitive conditions remain strong because of new capacity added by many of the largest producers.
While PVC producers said they continue to see good demand, they acknowledged that demand in October and early November was not as sharp as it was through September.
Even with the slight reduction in demand, producers said last week they expect 1996 to be nearly a record year, and that orders in this quarter remained at or near historic high levels for a fourth quarter of the year.
However, they also said their operating margins were shaved to below profitable levels with the decreases.
Large pipe producers said last week that their products continue to sell at brisk rates, and that their inventories are not growing.
Acetal. Increased production capacity is providing more resins and the work stoppage at General Motors helped to soften demand for acetal resins.
Buyers said last week they saw prices decline 3-4 cents a pound since early September, a result they attributed to increased competition among suppliers.
DuPont Engineering Polymers, Ultraform Corp. (a joint venture between BASF Corp. and Degussa Corp.), and Hoechst Celanese Corp. all increased acetal production capacities this year.
Producers said they have had double-digit growth and were at sold out positions in recent years.
Polycarbonate. Although they made their moves earlier than acetal producers, polycarbonate producers also significantly increased production capacities, and markets are swelling with PC resins.
GE Plastics, Dow Chemical Co. and Bayer Corp. all increased PC resin production in 1995.
The first effect of those increases was to ease lead times and sales control programs. Those effects were being seen in the market by June of this year.
Pressure from foreign producers helped to push prices down in late summer, and buyers said last week PC resins appear to be in plentiful supply.
Buyers said suppliers reduced prices by 6-8 percent in October and early November.