Engineering resin makers have been pushing hard to raise prices in the first months of the year. Polycarbonate, nylon, polyester and styrene-acrylonitrile makers have found success, while makers of acetal and polybutylene terephthalate may have to try again. Polycarbonate makers have boosted prices an average of 10 cents per pound since the start of the year. Market leader GE Plastics had been seeking an 11 cent-per-pound increase since mid-January.
Strong PC demand has been tied in to the optical media market for compact discs, CD-ROMs and digital versatile discs. An outage at a 140 million pound per year Japanese plant operated by Mitsubishi Chemical Co. also has impacted recent global supply, further tightening the market.
The North American PC market — dominated by GE Plastics, Bayer Corp. and Dow Chemical Co. — was expected to consume about 1.2 billion pounds of material in 1999, according to Peppin & Associates Inc. of Chesterfield, Mo.
The nylon market was able to attain roughly half of the increases it was seeking on nylon 6 and 6/6. Producers had sought to raise nylon 6 prices by 10 percent and 6/6 prices by 5 percent.
At current market prices, winning half of those increases translates into an average jump of 4 cents per pound in nylon 6/6 and 7 cents per pound in nylon 6.
A nylon buyer in the southeastern United States said that raw material costs for feedstocks such as caprolactam and "moderate tightening" in the market supported the increases.
"Demand continues to be healthy," said David Pomerantz, nylon business manager for DSM Engineering Plastics of Evansville, Ind. "The market is still highly automotive-driven. We're seeing very strong demand in transmission parts, door handles and fan shrouds."
Robust demand is leading DSM to expand capacity in Evansville by 15 percent later this year and to plan further expansion for 2001.
Pomerantz added that the nylon market could see another price hike later this year because of continued pressure on caprolactam caused by higher oil and gas prices.
Peppin & Associates' Austin Peppin said that a recent rebound in nylon fibers demand in southeast Asia also could tighten the North American market by diverting more material to that region.
North American nylon demand was up 11.5 percent in 1999, well ahead of the 4.5 percent increase in North American production, according to the American Plastics Council in Arlington, Va. Demand growth in January was even more hyperactive, as sales closed up more than 27 percent from January 1999, according to APC.
Automotive air intake manifolds continue to strengthen the nylon market. According to one industry estimate, 75-80 percent of manifolds on North American vehicles will be made out of nylon in 2000.
North American use of nylon 6, 6/6 and nylon compounds totaled about 1.2 billion pounds in 1999, according to Peppin & Associates.
Styrene-acrylonitrile prices are up an average of 5 cents per pound, riding the styrenic wave that has pushed polystyrene and ABS prices up as well. January SAN demand was up almost 21 percent over last year, according to APC.
Polyester resin prices also edged up 6 percent — an average of 6 cents per pound in unfilled grades and 8 cents per pound in 30 percent glass-filled grades — as primary producers DuPont and Honeywell were able to capitalize on demand growth.
Unfortunately for producers, price increase attempts for acetal and PBT fell by the wayside.
The acetal hike was scuttled after leading producer Ticona failed to support increases nominated by DuPont and BASF Corp. Without Ticona — and with the continued availability of lower-priced Asian material — the 5 percent increase attempt wasn't able to take hold.
"You can buy as much material from overseas as you want at a lower price," a Pennsylvania-based buyer said.
Industry sources added that the U.S. government's banning of MBTE as a fuel additive could impact the acetal market, since MBTE contains methanol, which accounts for approximately 30 percent of acetal's raw-material cost. The resulting surplus of methanol could begin to lower acetal prices by the end of the year, sources said.
North American acetal consumption approached 260 million pounds in 1999, according to Peppin & Associates.
In PBT, soft raw materials pricing and extra capacity brought on by DuPont in Cooper River, S.C., conspired to sink an increase that would have raised prices by 5 percent.
GE Plastics, Ticona and BASF also supply the North American PBT market, which was expected to produce about 330 million pounds of material in 1999, according to Peppin & Associates.
In general, early-year indicators have been positive for engineering resins, Peppin said.
"There's a real supply crunch in polycarbonate and ABS seems tight," he said. "Everyone's still amazed at how the automotive market has held up."
"With [sport utility vehicles] and larger vehicles using more plastic, that's good for engineering resins, since that market accounts for 30-45 percent of engineering resin use."