Polypropylene's slide slowed a bit in December but still was strong enough to trim another half cent per pound off average selling prices.
A market that many already consider oversupplied was loaded further by the recent opening of Dow Chemical Co.'s 550 million-pound-per-year plant in Freeport, Texas. The pending additions of almost 1.5 billion pounds of PP from Formosa Plastics Corp. USA and a joint venture between Union Carbide Corp. and Tosco Corp. are expected to add to the glut.
Producers also are concerned about slowdowns in injection molding markets such as appliances, consumer products and automotive. Injection molding accounted for about 30 percent of all U.S./Canadian PP sales through October, according to the American Plastics Council in Arlington, Va.
The film market also has been hurting, with PP sales into that area down more than 1 percent through October. Film sales make up more than 8 percent of the U.S./Canadian PP market.
Overall U.S./Canadian demand was on track to finish 2000 with a gain of only 2-2.5 percent after several years of double-digit and high-single-digit growth.
"I think we'll continue to see [price] descents at least through January," a Midwestern PP processor said. "There's an awful lot of material on the market."
PP makers are attempting to reverse the slide with price increases of 3 cents per pound for Feb. 1. BP Amoco Corp. and Formosa have broken from the pack with additional 3 cent-per-pound announcements for March 1 as well.
"We need at least 3 cents in price improvement," one executive at a major PP maker said. "We're under a lot of raw-material cost pressure, and there's no end in sight."
" was a slow year for demand," the executive added. "Industrial demand was generally weak, and it seemed like there was a substantial inventory drawdown in July and August."