North American polystyrene makers are looking to ring in the new year with a price increase.
Major PS resin producers — including Chevron Corp. of Houston, Dow Chemical Co. of Midland, Mich., and BASF Corp. of Mount Olive, N.J. — will attempt to raise PS prices 4 cents per pound, effective Jan. 1. The increase is needed to restore operating margins, according to Bob Koaches, senior product marketing manager for Dow's North American PS business.
Industry sources said the increase attempt was led by Chevron, which had been the only PS maker to hold out on a midsummer effort to boost prices. Chevron's lack of support, which officials said was linked to competitive pricing, eventually led Dow and others to rescind their attempts.
Officials at PS makers Nova Chemicals Ltd. of Calgary, Alberta; Huntsman Corp. of Salt Lake City; and Fina Oil and Chemical Co. of Dallas could not be reached for comment.
PS prices have dropped steadily since producers pushed through a 3 cent-per-pound price increase in March. Prices now stand a penny per pound lower than in January.
In the long-term, PS pricing has been generally lackluster since late 1996, having dropped about 12 cents per pound since then. Industry overcapacity has played a role, as has the Asian economic crisis.
Expansion projects have cooled off in 1998, with the exception of BASF's 240 million-pound addition in Joliet, Ill.
The PS market has seen moderate growth in 1998, with sales and captive use up 1.3 percent and production up 1.4 percent, according to the Society of the Plastics Industry Inc. in Washington.
PS sales into the furniture/construction and rigid-packaging markets have seen double-digit growth this year, but electrical/electronics sales are down more than 8 percent and sales to resellers and compounders are down more than 3 percent.