Major PET makers are lining up to push 7 cent-per-pound price increases for April 1.
Market leader Eastman Chemical Co. of Kingsport, Tenn., made that announcement last week. It quickly was matched by similar announcements from Nan Ya Plastics Corp. USA of Livingston, N.J., and M&G Group of Houston.
Officials with Wellman Inc. of Shrewsbury, N.J., said the firm had made no increase announcement as of Feb. 23. Officials at KoSa Inc. of Houston and DuPont of Wilmington, Del., could not be reached for comment.
At the same time, processors and industry contacts are reporting the North American PET market saw another 2-3 cents of price erosion in late 2000. That drop would bring the total amount of price erosion reported since late summer to 4-5 cents per pound.
The increase is needed because of decreased margins among PET makers and because of increased raw material and energy costs, according to Nan Ya assistant sales manager Tod Durst.
"We've seen around 3 cents in increases on paraxylene and [ethylene] glycol," Durst said. "Plus there's been ongoing pressure from high energy costs."
"There's been a real problem with natural gas," added Fred Fournier, M&G's global sales and marketing director. "High prices have probably added 2 cents a pound to our production costs in the last year."
Nan Ya expects its new 360 million-pound-per-year PET line in Lake City, S.C., to be fully operational by midyear, Durst said.
Several industry insiders estimate that North American PET operating rates currently stand at roughly 85-90 percent, as compared with about 80-85 percent at this time last year.
Rates have been improved by the exporting of some North American material to Europe, where PET demand is currently high, sources said.
PET makers also are hoping for a strong rebound from PET's dominant carbonated soft drinks end market, which posted an anemic growth rate of around 2 percent last year.