Makers of suspension PVC and solid polystyrene have announced price increases in attempts to reverse lengthy price declines, which continued in November and December.
Major PVC makers will try to lift prices by 2 cents per pound Feb. 1, following up with more 2 cent increases March 1. PS producers have announced a single round of 3 cent increases for Feb. 1.
PVC and PS each lost 2 cents in late 2001. On the year, average PVC prices dropped about 8 cents per pound, while average crystal and high-impact PS prices slipped 10 cents per pound, according to the Plastics News resin pricing chart.
U.S./Canadian PVC sales were up 1.5 percent through October, according to the American Plastics Council in Arlington, Va., but sales for domestic use were down 3.5 percent. A jump of more than 150 percent in export sales pushed the market into positive territory.
PVC makers are hoping inventory restocking will boost sales, while a snug feedstock market helps raise selling prices.
``Right now, resin inventories are very lean, as are downstream inventories of finished products,'' said Barry Hendrix, PVC business director for Oxy Vinyls LP of Dallas. ``There's a need to replenish and restore some stability to inventory levels.''
On the feedstock side, Oxy Vinyls shut down a major chlor-alkali plant in Deer Park, Texas, in December. The plant represented about 4 percent of North American capacity. Supplies of vinyl chloride monomer also could be somewhat tighter in 2002, as a number of plants will be down for required maintenance.
PVC buyers' reactions to the increase attempts were varied. One Midwestern buyer said he would be surprised if any increase took hold before March, which would match an expected second-quarter improvement in the construction market. That market generated about 63 percent of 2001 U.S./Canadian domestic sales through October.
But a Texas-based buyer said price increases in feedstocks such as chlorine, as well as a drying up of the availability of spot material, could give PVC makers some leverage on the increases.
Industry sources added that pipe inventories remained relatively high, and that PVC plant operating rates continue to hover around 80 percent.
In PS, the 2 cent November-December dip closed out a year in which margins collapsed and PS makers were unable to find pricing leverage.
``The [PS] market looks like it's at the bottom, but [PS makers] will have to lock arms to get the increase,'' a New England-based PS buyer said. ``There's still a lot of material and special deals out there.''
Industry sources said that PS producers, who are running their plants at less than 80 percent of capacity, could benefit from early-year inventory restocking, particularly in the food-packaging and consumer-goods markets.
But some of those sales gains could be undone later in the year when Atofina Petrochemicals adds 700 million pounds of capacity at its plant in Carville, La.
U.S./Canadian PS sales were off more than 7 percent through October, according to APC. The dominant food-service end market was off more than 5 percent, with sales to resellers and compounders - which represent 14 percent of domestic sales - down almost 16 percent.