LIVINGSTON, N.J. — Scuffling for position continues in the PVC market, as Formosa Plastics Corp. USA has withdrawn price increases announced for October, November and December in favor of 2 cent price increases effective Jan. 1 and March 1.
The move, announced Nov. 18, comes a week after Occidental Chemical Corp. had rescinded its October 2 cent price increase attempt because of strong resistance from buyers in the pipe market.
``Instead of pushing the old increase back, which would be meaningless, we're taking a different strategy,'' Formosa PVC business director Tom Stevning said in a Nov. 18 interview at the company's Livingston headquarters. ``We're sending a message that for the next six months we know what the industry will be doing.''
The January and March increase attempts should fit in with housing-related companies' seasonal efforts to build their PVC product inventories, Stevning added.
Geon Co., a top three PVC maker based in Avon Lake, Ohio, said it would ``meet competitive situations'' for the remainder of the year but would probably not formally rescind its previously announced increase attempts.
``We'll assess the market and take a strong look at raising prices early next year,'' Geon resin sales director Barry Hendrix said in a Nov. 20 phone interview from Avon Lake.
Although OxyChem officials ``recognized the rationale'' for Formosa's action, according to a company spokesman, it had not announced a similar move.
Condea Vista Co. of Houston earlier had said it would probably join OxyChem in rescinding the October increase, while market capacity leader Shintech Inc. of Houston said it will continue to push the 2 cent October increase.
OxyChem's decision to rescind the increase was based on price pressures that independent pipe producers were seeing, according to an OxyChem spokesman. Integrated pipe producers such as Formosa and Westlake Group of Houston who were seeking resin price increases had not raised prices on their finished pipe products.
Stevning said that explanation was somewhat misleading, since J-M Manufacturing Co. Inc. — the leading pipe producer owned by parent company Formosa Plastics Corp. — buys between 10 and 15 percent of its resin from sources outside of the company. He added a major independent pipe maker could have a similar effect on the market even if it didn't have a direct connection to a resin maker.