Prices for nylon and polycarbonate resin continued to drop in late 2001, but improved January orders are giving producers some hope for 2002.
In both nylon and PC, prices that had dropped 10 percent through the first three quarters of 2001 dropped another 5 percent in the fourth quarter, according to suppliers and buyers contacted recently.
In nylon 6, that added up to an average fourth-quarter price drop of 7 cents per pound. In nylon 6/6 and general-purpose grades of PC for injection molding, the decline equaled an average of 8 cents per pound. Those changes are reflected on this week's Plastics News resin pricing chart.
The nylon market is trying to recover from a year in which sales volume, pricing and profitably all were hammered, particularly from a turndown in the automotive market. Although zero percent financing boosted vehicle sales in late 2001, most carmakers were selling existing inventory rather than increasing production, which limited the need for more nylon-based automotive parts. Automotive applications account for 40 percent of all nylon resin sales.
Through October, North American nylon sales were down 14 percent, according to the American Plastics Council in Arlington, Va. Sales into the automotive/truck end market were down a similar percentage.
``After a very disappointing December, we saw January return to sales levels we had seen in October and November,'' said Ferdinand Bauerdick, Wilmington, Del.-based DuPont's global nylon business director. ``There's some light at the end of the tunnel.
``Orders for the next few months are coming in as expected,'' he added. ``Sales of cars were very good last year, so dealers' inventories have to be pretty low, meaning [auto] production will need more [nylon] products.''
Solutia Inc.'s Michael Collella added that his firm saw ``a little more volume'' in January nylon sales, but that markets for film and monofilament were still soft.
``Buyers really ran down inventory in the last 45 days of ,'' said Collella, commercial director of the St. Louis firm's nylon plastics and polymers business. ``That could lead to some inventory restocking.''
The PC market continued to stumble in late 2001, as sales into electronics, information technology and optical media all softened. Global oversupply has led market leader GE Plastics of Pittsfield, Mass., to delay a major capacity addition in Cartagena, Spain, until 2003.
Inventory restocking helped to boost January sales somewhat, although pricing remained under pressure, said several buyers. Markets for PC feedstocks also appear to be loose, giving PC makers little leverage to raise prices.
One encouraging sign is in the U.S. compact disc market. Although sales were down more than 5 percent in the first half of 2001, the Recording Industry Association of America reported that its number of gold and platinum certifications - for discs selling 500,000 or 1 million copies - totaled 168 for November-December 2001. By comparison, the RIAA awarded only 144 such certifications for the same period in 2000.
Full-year RIAA sales totals are expected to be released later this month.