Spring weather is heating up price moves throughout the resin industry, as PET and expanded polystyrene prices have risen and nylon, acetal and liquid crystal polymer prices are looking to do the same. PET producers were able to use raw material increases in paraxylene, ethylene glycol and purified terephthalic acid to push through 7 cent-per-pound increases since March 1.
Although PET prices rose 13 cents per pound last year, prices fell back 3 cents in late 1999 and early 2000. The result of the 3 cent erosion and the 7 cent March jump is a 4 cent-per-pound increase on PET bottle resin prices on this week's Plastics News pricing chart.
"The market's not as tight as [PET makers] want you to believe," a Texas-based PET processor said. "This increase was mostly due to the significant increase in raw materials."
A PET processor in the Pacific Northwest added that he's had no problem sourcing material this year, but has seen an increase in the amount of material available from Indonesia and other parts of Southeast Asia. The offshore material might make it difficult for producers to raise prices again in 2000, he said.
No further increase attempts have been announced, but several sources said they expect PET makers to try a 3 or 4 cent move later this summer.
Double-digit sales and volume growth the industry has enjoyed for the past several years looks to continue in 2000, particularly as carbonated soft drink demand revs up for its annual summer blitz.
The Pacific Northwest processor added he has seen some business in single-serve milk containers — which had been mostly in high density polyethylene — moving to PET.
In EPS, prices have climbed an average of 8 cents per pound since mid-1999, as demand and styrene monomer costs have climbed.
EPS makers Nova Chemicals Corp., Huntsman Corp. and BASF Corp. also are pushing two sets of 8 cent-per-pound increases for April 1 and June 1.
"The increases are substantial, but when you look at where we are against styrene monomer and with tight supply and steady demand, we believe they're needed," a Nova spokesman said.
EPS sales in the United States and Canada climbed 8 percent in 1999, while production was up 10 percent, according to the American Plastics Council in Arlington, Va.
Nylon makers are attempting to recapture some momentum after achieving, on average, only half of the price increases they had sought earlier in the year.
DuPont of Wilmington, Del., which ranks as North America's largest nylon maker, is seeking hikes of 8-10 percent on its Zytel-brand nylon 6/6 resins effective June 1. At current market prices, that would mean increases of 12-15 cents per pound.
DuPont nylon business manager Bjorn Hedlund said tightening global supply, as well as price increases for nylon raw materials such as caprolactam and adepic acid, are behind the increase attempt.
"There's tightness in the whole chain," he said. "Demand is catching up to supply, but we're not at reinvestment levels."
The need for the increase is not just about adjusting prices for raw material costs, according to Walter Fields, vice president of sales and marketing for DuPont's Engineering Polymers unit.
"It's a combination of factors," Fields said. "Sometimes we slip into a mode where it's all about passing through costs. But we've seen very strong growth and demand as well.
"We're using multiple schemes to increase our productivity, which would usually allow us to keep pace with [raw material] cost increases," Fields added. "But over the last quarter or two we've seen very severe escalation and haven't been able to keep up."
DuPont also is making a move in acetal, where it will try to raise prices 6-8 percent. At current market prices, that would result in an average increase of 7-10 cents per pound.
DuPont and BASF of Mount Olive, N.J., had attempted to raise acetal prices earlier in the year, but saw only limited success when market leader Ticona of Summit, N.J., declined to support their efforts.
"The market is still challenging, but we're seeing higher capacity utilizations of more than 90 percent worldwide," DuPont acetal business manager Dwayne Kearns said. "There's strong growth in Asia and tightening supply."
Kearns said supply could become an issue, since acetal's anticipated 6 percent growth rate would create a need for 80 million more pounds of material in a market where no capacity expansions are planned.
Competing material from Asia will continue to be available in the spot market, but its impact should diminish as acetal demand grows, Kearns added.
In liquid crystal polymers, DuPont has announced a 5 percent increase attempt for June 1. The move would raise prices 25-50 cents per pound at current market levels of $5-$10 per pound.
The LCP industry is growing 20 percent annually, but DuPont's growth rate has surpassed that mark since it entered the LCP business in 1997, LCP business manager Chris Murphy said. Red-hot growth in electronic connectors has fueled that growth.
In addition, prices of the nine different petroleum-based monomers DuPont uses to make its LCPs all have risen along with the price of oil, he said.
LCP demand also is leading DuPont to increase production 10-20 percent via a debottlenecking at its LCP production site in Chattanooga, Tenn., later this year. That debottlenecking could be increased further to meet market demand, Murphy said.