For the second time this year, average selling prices for PVC and polypropylene resin have moved up.
The PVC market absorbed an average increase of 2 cents per pound in February after taking a similar hit in January. PP prices were up an average of 3 cents per pound in February, duplicating their January move.
Big upswings in natural gas prices caused production slowdowns at several chloralkali plants in the Gulf Coast region in late February, but PVC industry watchers said the slowdowns should not have much effect on PVC supply.
``PVC producers are holding to contract amounts, but we really haven't tried to buy more,'' a Midwest PVC buyer said. ``It seems like there's enough material out there, and these increases are for producers to cover their energy costs.''
Colder-than-expected winter weather has slowed construction markets in the Midwest and Northeast, but business has been brisk in the Southeast and on the West Coast, sources said. The construction market has a major impact on the PVC world via its consumption of PVC pipe and siding.
As a result of the weather, PVC pipe inventories are balanced in the Southeast and on the West Coast, but are slightly higher than normal in the Midwest and Northeast.
``Residential construction in the Southeast is pretty good, but even if the snow is gone [in the Midwest and Northeast], there's 3 feet of frost underground you'd have to dig through because it's been so cold,'' the Midwest buyer said.
The only production issue affecting supply has been a planned maintenance turnaround at Georgia Gulf Corp.'s plant in Oklahoma City. The plant is scheduled to be fully operational by the end of the month, contacts said.
PVC makers now are working on 4 cent-per-pound increases for March. U.S. and Canadian PVC sales were up more than 4 percent in 2002, according to final statistics from the American Plastics Council in Arlington, Va. That total includes a gain of almost 3 percent in pipe-related sales and of almost 9 percent in siding-related sales.
In PP, force majeure situations on feedstock propylene monomer have put a pinch on some PP makers and tightened supply, allowing the latest 3 cent-per-pound increase to take hold.
PP makers now are working to pass through additional 3 cent hikes for March. A maintenance turnaround at a Chevron Phillips Sumika Polypropylene Co. plant in Pasadena, Texas, could tighten supply further.
U.S. and Canadian PP sales growth was almost 6 percent in 2002, according to APC. Sales of PP into injection molded consumer products grew more than 13 percent. PP sales into injection molded rigid packaging - including cups, containers, caps and closures - jumped 14 percent vs. 2001.
