Ongoing erosion trimmed another 6 cents per pound off commodity-grade ABS prices in the second half of 1998, while seasonal pressures sliced PET bottle resin prices by an additional 4 cents per pound in November and December.
In addition, polycarbonate prices dropped an average of 10 cents per pound in the second half of 1998 as plentiful supply increased competition among major producers, according to several processors contacted recently.
Existing overcapacity and increased competition took a heavier toll on pricing than previously reported on Plastics News' resin pricing chart. As a result, the chart's commodity-grade ABS prices are being corrected downward by an additional 10 cents per pound to reflect price erosion that occurred in late 1997 and the first half of 1998.
ABS production remained relatively flat in 1998, while intermaterial competition from polypropylene and other materials played a significant role in the market. Market leaders GE Plastics of Pittsfield, Mass., and Bayer Corp. of Pittsburgh — which combined hold more than 75 percent of the North American market — have no major capacity expansions on tap for 1999.
Nonetheless, the market will be hit with 150 million additional pounds when BASF splashes into North America with a plant in Altamira, Mexico.
In PET, prices retreated from mid-summer highs and are more than 5 cents lower than they were in early 1998. Buyers cited an abundance of material, fueled by Wellman Inc.'s new plant in Port Bienville, Miss., as justification for the price drop.
A major Pennsylvania-based buyer said he doesn't expect a major price increase initiative from PET makers until spring.
``[PET makers] are being smart and holding out,'' the buyer said.
The polycarbonate drop comes as production has begun to outpace volume in the North American market. Officials at market leader GE Plastics have indicated this trend could turn around later in the year as lower prices for digital versatile disc equipment feeds demand for those products.
But that doesn't change the fact that PC buyers currently have no problem obtaining material.
``We're paying less in Europe and Japan for the same material,'' a Utah-based PC buyer said. ``We're not going to subsidize [PC makers'] profitability goals in North America at the expense of our company.''