Skip to main content
Sister Publication Links
  • Sustainable Plastics
  • Rubber News
Subscribe
  • Login
  • Register
  • Subscribe
  • News
    • Processor News
    • Suppliers
    • More News
    • Digital Edition
    • End Markets
    • Special Reports
    • Newsletters
    • Resin pricing news
    • Videos
    • Injection Molding
    • Blow Molding
    • Film & Sheet
    • Pipe/Profile/Tubing
    • Rotomolding
    • Thermoforming
    • Recycling
    • Machinery
    • Materials
    • Molds/Tooling
    • Product news
    • Design
    • Mergers & Acquisitions
    • Sustainability
    • Public Policy
    • Material Insights Videos
    • Numbers that Matter
    • Automotive
    • Packaging
    • Medical
    • Consumer Products
    • Construction
    • CEO Issue
    • Diversity
    • Best Places to Work
      • 2022 winners
    • Processor of the Year
    • Rising Stars
    • Women Breaking the Mold
  • Opinion
    • The Plastics Blog
    • Kickstart
    • One Good Resin
    • BRICS and Plastics
    • All Things Data
    • Viewpoint
    • From Pillar to Post
    • Perspective
    • Mailbag
    • Fake Plastic Trees
  • Shop Floor
    • Blending
    • Compounding
    • Drying
    • Injection Molding
    • Purging
    • Robotics
    • Size Reduction
    • Structural Foam
    • Tooling
    • Training
  • Events
    • Plastics News Events
    • Industry Events
    • Injection Molding & Design Expo
    • Livestreams/Webinars
    • Editorial Livestreams
    • Ask the Expert
    • Plastics News Events Library
    • Processor of the Year submissions
    • Plastics News Executive Forum
    • Injection Molding & Design Expo
    • Plastics News Caps & Closures
    • Women Breaking the Mold Networking Forum
    • Plastics in Automotive
    • Injection Molding & Design Expo
    • Reuters Responsible Business Europe 2022
    • ReifenhƤuser Technologies Livestreams
    • Polymer Points Live
    • Numbers that Matter Live
    • Plastics in Politics Live
    • Sustainable Plastics Live
    • Plastics Caps & Closures Library
    • Plastics in Healthcare Library
    • Women Breaking the Mold Networking Forum Library
  • Resin Prices
    • All Resins
    • Commodity TPs
    • High Temp TPs
    • ETPs
    • Thermosets
    • Recycled Plastics
    • Historic Commodity Thermoplastics
    • Historic High Temp Thermoplastics
    • Historic Engineering Thermoplastics
    • Historic Thermosets
    • Historic Recycled Plastics
  • Rankings & Data
    • Injection Molders
    • Blow Molders
    • Film Sheet
    • Thermoformers
    • Pipe Profile Tubing
    • Rotomolders
    • Mold/Toolmakers
    • LSR Processors
    • Recyclers
    • Compounders - List
    • Association - List
    • Plastic Lumber - List
    • All
  • Directory
  • Custom
    • Sponsored Content
    • Conair Sponsored Content
    • KraussMaffei Sponsored Content
    • ENGEL Sponsored Content
    • White Papers
    • Classifieds
    • Place an Ad
    • Sign up for Early Classified
MENU
Breadcrumb
  1. Home
  2. News
June 19, 2000 02:00 AM

PVC, PP prices nudge upward as report decries `fool's rally'

Frank Esposito
Senior Staff Reporter
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    PVC and polypropylene prices each have risen an average of 2 cents per pound since April, while polyethylene makers continue to haggle with buyers over increase attempts ranging from 3 cents to 5 cents per pound. Added to this tumultuous mix is a report from an industry analyst that suggests the petrochemical and resin price climb that began in 1999 might be "a fool's rally" that occurred too early in the industry's historic business cycle.

    The PVC hike took hold in early May, although several processors said a slowdown in the construction market and a rise in producers' inventories is taking away a good deal of the justification for additional increases.

    "[PVC makers] just forced it through," a Texas-based processor said. "Their chlorine costs jumped up a little bit, but the tightness they thought they were going to see in the market never materialized. I don't know anybody who can't get resin."

    A New York-based PVC processor added that demand for prime PVC may slow as processors deplete supplies of off-spec material they acquired when the market was tight earlier in the year.

    Several processors also reported that they weren't hearing the same accounts of pipe shortages at construction sites that were circulating in the industry in February and March.

    Oxy Vinyls LP, the Dallas firm that ranks as North America's largest PVC maker, had nominated a 2 cent-per-pound increase for June 1, but other PVC makers did not support that move.

    Through March, domestic PVC use was up about 8 percent, according to the American Plastics Council in Arlington, Va.

    The PP market continued its 2000 trend of winning partial increases and immediately announcing further attempts. Most processors contacted saw 2 cents out of a 4 cent attempt that hit in early June.

    Strong competition among PP makers is one of the factors preventing full increases from taking hold, according to an Illinois-based PP buyer. To date, the source estimated, an average of 7 cents out of a possible 13 has been accepted by processors.

    "There's some discord among producers," the buyer said. "They're trying to hold market share and are willing to shave a penny off the price to do it."

    PP makers have claimed that the price increases have allowed them to keep pace with rising propylene monomer prices.

    Most PP makers are seeking 4 cent increases for June 1, while BP Amoco Chemicals of Alpharetta, Ga., and Dow Chemical Co. of Midland, Mich., are pushing for increases of 3 cents and 4 cents, respectively, in July.

    Sales-wise, PP has enjoyed a jump of about 8 percent in the United States and Canada through March, APC reported.

    PE makers continue to fight a pitched battle in their attempt to raise prices. The fight is now in its third month, as many of the increases being haggled over originally were to take effect April 1.

    "Supplies aren't absolutely tight," a Chicago-area PE buyer said. "The backlog of orders, new sales and higher growth rates aren't there either."

    Producers are split on enforcement dates and amounts as well. HDPE makers split an original 5 cent, April 1 move into 3 cents for April 1 and 2 cents for May 1, while LDPE and LLDPE makers moved the whole nickel back to May 1.

    Most processors contacted said they expected the price battle to be settled in late June.

    "We're in a very fluid situation right now," said Howard Rappaport, a consultant with CMAI Inc. in Houston. "The third [PE] increase is in the process of implementation, but prices are at historic highs and some buyers still haven't been able to pass on earlier increases."

    The notion that the 18-month-long pricing climb the market has seen might be "a fool's rally" comes from Probe Economics Inc., the Millwood, N.Y.-based consulting firm that recently completed its latest in-depth economic report on the U.S. plastics industry for Washington-based Society of the Plastics Industry Inc.

    In a May 31 release, Probe President Fred Peterson suggests that rising oil prices, a strong economy and delayed overseas expansions led market prices to climb in 1999 rather than in 2002 as some observers expected.

    "It's a little early for margins to improve," Peterson said June 13 . "It's very likely the economy will slow down and undo the extra demand we've seen in the last 12 months.

    "If the economy gets below the point where processors can pass price increases through, then rising feedstock costs will catch resin producers from behind. You have to worry that we've already seen some natural demand for 2000 in 1999."

    Recessions in 2001 or 2002 would drive HDPE prices below 30 cents per pound, while PP prices would sink below 25 cents per pound in that scenario, according to Probe.

    "It will be a few years before PP soaks up the new capacity that's hit the market, so a lot of material will have to be sold cheaply," Peterson said. "PE supply is much tighter and isn't as bad off, but the whole industry is dangerously close to a boom-bust cycle."

    RECOMMENDED FOR YOU
    Barr, CompuMold win top AMBA honors
    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Plastics News would love to hear from you. Email your letter to Editor at [email protected]

    Most Popular
    1
    20/20 adds Southern exposure with Vantage acquisition
    2
    Shell nearing completion of Pennsylvania PE facility
    3
    Berry pledges to further cut greenhouse gas emissions
    4
    Barr, CompuMold win top AMBA honors
    5
    Dynamic Tool buys former Kohl's site
    SIGN UP FOR TO RECEIVE THESE EMAILS AND ENEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Get our newsletters

    Staying current is easy with Plastics News delivered straight to your inbox, free of charge.

    Subscribe today

    Subscribe to Plastics News

    Subscribe now
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter
    • Instagram

    Plastics News covers the business of the global plastics industry. We report news, gather data and deliver timely information that provides our readers with a competitive advantage.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI 48207-2997

    Customer Service:
    877-320-1723

    Resources
    • About
    • Staff
    • Editorial Calendar
    • Media Kit
    • Data Store
    • Digital Edition
    • Custom Content
    • People
    • Contact
    • Careers
    • Sitemap
    Related Crain Publications
    • Sustainable Plastics
    • Rubber News
    • Urethanes Technology
    • European Rubber Journal
    • Tire Business
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Copyright Ā© 1996-2022. Crain Communications, Inc. All Rights Reserved.
    • News
      • Processor News
        • Injection Molding
        • Blow Molding
        • Film & Sheet
        • Pipe/Profile/Tubing
        • Rotomolding
        • Thermoforming
        • Recycling
      • Suppliers
        • Machinery
        • Materials
        • Molds/Tooling
        • Product news
        • Design
      • More News
        • Mergers & Acquisitions
        • Sustainability
        • Public Policy
        • Material Insights Videos
        • Numbers that Matter
      • Digital Edition
      • End Markets
        • Automotive
        • Packaging
        • Medical
        • Consumer Products
        • Construction
      • Special Reports
        • CEO Issue
        • Diversity
        • Best Places to Work
          • 2022 winners
        • Processor of the Year
        • Rising Stars
        • Women Breaking the Mold
      • Newsletters
      • Resin pricing news
      • Videos
    • Opinion
      • The Plastics Blog
      • Kickstart
      • One Good Resin
      • BRICS and Plastics
      • All Things Data
      • Viewpoint
      • From Pillar to Post
      • Perspective
      • Mailbag
      • Fake Plastic Trees
    • Shop Floor
      • Blending
      • Compounding
      • Drying
      • Injection Molding
      • Purging
      • Robotics
      • Size Reduction
      • Structural Foam
      • Tooling
      • Training
    • Events
      • Plastics News Events
        • Plastics News Executive Forum
        • Injection Molding & Design Expo
        • Plastics News Caps & Closures
        • Women Breaking the Mold Networking Forum
        • Plastics in Automotive
      • Industry Events
        • Injection Molding & Design Expo
      • Injection Molding & Design Expo
      • Livestreams/Webinars
        • Reuters Responsible Business Europe 2022
        • ReifenhƤuser Technologies Livestreams
      • Editorial Livestreams
        • Polymer Points Live
        • Numbers that Matter Live
        • Plastics in Politics Live
        • Sustainable Plastics Live
      • Ask the Expert
      • Plastics News Events Library
        • Plastics Caps & Closures Library
        • Plastics in Healthcare Library
        • Women Breaking the Mold Networking Forum Library
      • Processor of the Year submissions
    • Resin Prices
      • All Resins
      • Commodity TPs
        • Historic Commodity Thermoplastics
      • High Temp TPs
        • Historic High Temp Thermoplastics
      • ETPs
        • Historic Engineering Thermoplastics
      • Thermosets
        • Historic Thermosets
      • Recycled Plastics
        • Historic Recycled Plastics
    • Rankings & Data
      • Injection Molders
      • Blow Molders
      • Film Sheet
      • Thermoformers
      • Pipe Profile Tubing
      • Rotomolders
      • Mold/Toolmakers
      • LSR Processors
      • Recyclers
      • Compounders - List
      • Association - List
      • Plastic Lumber - List
      • All
    • Directory
    • Custom
      • Sponsored Content
      • Conair Sponsored Content
      • KraussMaffei Sponsored Content
      • ENGEL Sponsored Content
      • White Papers
      • Classifieds
        • Place an Ad
        • Sign up for Early Classified