AKRON, OHIO — Prices for PVC and high density polyethylene resin dipped in August, according to resin makers and buyers contacted last week.
Formosa Plastics Corp. USA of Houston confirmed its PVC prices dropped 1 cent in August. But most buyers contacted — including sizable purchasers in Illinois, Ontario and Massachusetts — reported they saw a drop of 2 cents, according to their invoices.
Plastics News' resin pricing chart is showing a 2 cent reduction on all grades of PVC to reflect this move.
Tom Stevning, Formosa's PVC business director, said the market shows signs of stabilizing. The company's Point Comfort, Texas, plant, which had cut production rates because of a lag in demand, is back to 100 percent, Stevning said in a Sept. 3 telephone interview from his Indianapolis office.
``We're not going to see a penny-a-month reduction for the rest of the year,'' said Stevning, adding that a 3 cent upswing in the price of PVC exported to Asia and South America in late August was a positive sign for suppliers and the industry.
One Massachusetts PVC buyer said the market still is feeling the effects of a 3 percent downturn in U.S. housing starts for the first six months of the year.
HDPE prices also dropped 2 cents per pound, according to several buyers. Major manufacturers including Lyondell Petrochemical Co. of Houston confirmed that report.
Officials at Mobil Chemical Co. of Fairfax, Va., said some of their customers saw the 2 cent drop, while Phillips Petroleum Co. officials in Bartlesville, Okla., said their decrease was closer to 1 cent.
Several buyers confirmed the 2 cent slide, which is shown on Plastics News' pricing chart for all grades of HDPE.
Industry executives claimed that a few producers switched some linear low density PE production lines to manufacture HDPE for a short time in August, putting more material on the market.
``That's an unusual thing to happen and it generated some instability,'' one executive said.
Mobil was one of the firms alleged to have made the production switch, but the company denied the charge.
Stu Agler, Mobil's PE business director in Edison, N.J., said his company's Beaumont, Texas, facility did not increase its HDPE production last month. He added that it is impossible for the plant to swing production from LLDPE to HDPE quickly enough to capitalize on short-term market trends.
``We already have forecasts in place and orders to fill,'' Agler said Sept. 3. ``Some days I wish we had that ability, but we don't.''
Other executives blamed the price drop on lower ethylene prices, rail congestion in the Houston area, softness in LLDPE prices and material competition between HDPE, LLDPE, LDPE and polypropylene.
