Polycarbonate producers are reporting mixed results for their attempts to raise prices by 6 cents per pound last May.
Buyers credited market overcapacity with holding off the increase. In the past year, Bayer Corp. of Pittsburgh added 120 million pounds of capacity in Baytown, Texas, while Midland, Mich.-based Dow Chemical Co. added 40 million pounds in Freeport, Texas.
Bill Driscoll, PC business manager for market leader GE Plastics of Pittsfield, Mass., said his company still is working to pass the increase through to some buyers.
``Reinvestment in the industry continues at a good clip, but I don't really think there's an overcapacity,'' Driscoll said in a recent telephone interview from his office in Mount Vernon, Ind. ``Overall we've been pleased with the business and are looking at growth of about 8 percent this year.''
The May increase attempt was affected by its closeness to a fall 1997 increase effort, said Tom O'Neill, Bayer's vice president of PC business management. The fall effort raised PC prices 4 cents per pound, according to buyers contacted by Plastics News.
``Naturally, when you bring out an increase on the heels of another that's less than a year old, it generates additional competition,'' O'Neill said. ``When you try to raise prices twice in one 12-month period, people are inclined to go shopping, even if they don't usually do that.''
Both O'Neill and Driscoll reported solid growth in data storage uses, including CD-ROMs and recordable compact discs.
Dow considered its increase attempt a success even though it did not immediately go through to all customers, PC senior product marketing manager Gary O'Neill said. He said the supply and demand scenario for the second half of 1998 does not seem to be as conducive to a price hike as first-half conditions were.
But current market overcapacity may be short-lived, said Lou Kattus, a consultant with Phillip Townsend Associates Inc. in Mount Olive, N.J. ``There's a slight overcapacity, but the market's been growing at about 10 percent per year,'' Kattus said. ``Producers may have got a little ahead of themselves on this increase, but I think eventually they'll get it.''
Continued increases in PC demand could set the stage for a successful price increase early next year, Kattus added.
Freedonia Group Inc., a Cleveland-based market research firm, predicts annual PC growth of more than 5 percent through 2001. Electrical and electronic markets for PC will grow almost 7 percent in the same period. Freedonia officials credited information storage and business equipment applications with fueling PC growth.
The fall 1997 price increase is being reported on this week's Plastics News resin pricing chart. The increase was reported in a January PC market update, but the chart was not changed since the increase fell within PN's existing PC price range. Subsequent interviews with buyers have revealed the lower end of that range actually increased in late 1997 and early 1998.
The 6 cent attempt producers had sought in May was not confirmed by a majority of buyers contacted and is not reflected in the chart.