PVC prices in March continued their climb back from rock-bottom levels, while major PVC makers announced more increase attempts to capitalize on strong early-year demand.
Prices for suspension-grade PVC resins rose an average of 1 cent per pound, according to several PVC buyers and producers. The change is reflected in this week's Plastics News resin pricing chart.
Major producers also are working to put across a 2 cent-per-pound increase that was to be effective March 1. Meanwhile, PVC makers Geon Co. of Avon Lake, Ohio, and Shintech Inc. of Houston each announced 2 cent-per-pound increases set for May 1.
``Prices had gotten so low that I don't think anybody expected them to hang around that level,'' a Washington-based PVC buyer said. ``The producers had to pick them up.''
PVC prices now have risen 3 cents per pound since November.
Both buyers and producers cited strong demand and reduced supplies as reasons for the recent increases. Various moves by Westlake PVC Corp. of Houston, Borden Chemicals and Plastics LP of Geismar, La., and Condea Vista Co. of Houston have removed about 900 million pounds of capacity from the North American market since September.
Construction demand, which many view as a leading PVC indicator, also remained strong in February, dropping only slightly from January's sky-high rates and closing at a seasonally adjusted annual rate of 1.8 million units, according to the Commerce Department.
The growth is not reflected yet in totals compiled by the Society of the Plastics Industry Inc. in Washington. SPI numbers for January show U.S. PVC sales down about 1 percent from the same month in 1998, while PVC production dropped almost 8 percent.
Nonetheless, the supply/demand balance of the domestic PVC market has improved considerably since 1998, according to Paul Carrico, Condea Vista's PVC product manager.
``We're expecting good growth because of continued demand and little capacity addition,'' Carrico said.
Another PVC executive said the increases have been boosted by low processor inventories resulting from high sales of finished goods. Processors kept inventories relatively low in 1998 in anticipation of price drops that totaled 7 cents per pound in 1998.
But pipe makers, the industry's dominant end-users, have struggled to pass price increases through to their customers, in light of increasingly cutthroat competition in the domestic pipe market.
``We've taken the increases, but it's been tough getting our customers to do the same,'' a Texas-based PVC buyer said.