Polystyrene market leader Dow Chemical Co. of Midland, Mich., has announced a 2 cent-per-pound price increase on its PS resins effective July 1.
``The price increase is being driven by both current supply/demand balances and ... the very strong demand growth of 1997 continuing into 1998,'' North American PS commercial director Bob Beil said in a news release.
``Longer term, we see continued solid growth in polystyrene demand coming off of a higher 1997 North American demand base than anyone predicted,'' Beil said. ``Supply may seem comfortable at present, but 3 to 4 percent growth rates on a very large volume base consume capacity in a hurry.''
PS sales and captive use through March are up almost 2 percent over similar 1997 totals, while production is up more than 1 percent, said the Society of the Plastics Industry Inc. in Washington.
The move is Dow's first attempt to raise prices since it rescinded a 3 cent increase attempt scheduled for April 1.
Dow and other major PS makers have been successful in maintaining a 3 cent price increase that took effect Jan. 1. Some industry observers said the April 1 attempt was pulled because it followed the January effort too closely.
Officials at other PS leaders, including Huntsman Corp., and BASF Corp., could not be reached at press time.