Tighter supplies and raw material pressure drove polypropylene prices up another 2 cents per pound in April, while similar conditions have boosted nylon resin pricing levels by about 10 percent in that same period.
Meanwhile, polyethylene makers were preparing to lift prices again, even as a major PE producer reduced the amount of its May 15 increase attempt.
The latest 2 cent jump in PP means average selling prices now are 11 cents higher than they were at the start of the year. A lack of any announced new capacity for 2004 and 2005 is giving producers hope that they can hold on to the higher prices for an extended period.
But in the short-term, pressure for further increases seems to be lessening. Increases of 5 cents per pound originally announced for March ended up spread out over March and April. Buyers also are skeptical about 5 cent moves announced for May.
As pressure has lessened on supplies of propylene feedstock, some of the urgency behind price moves has waned, several buyers said. American military success in Iraq also has lowered anxiety surrounding crude oil supplies.
``The monomer situation this time around is different than it's been in prior years,'' a Midwestern PP buyer said. ``[PP makers] really have just kept up with monomer costs. I don't know if they've improved their [profit] margins all that much.''
Several sources said Lyondell Petrochemical Co., a major propylene supplier, had placed customers on 65 percent allocation. That allocation has been lifted, with the market loosening somewhat as a result.
Through February, U.S./Canadian PP sales were up more than 2 percent vs. the same period in 2002, according to the American Plastics Council in Arlington, Va. Several industry watchers said the growth rate only appears low because early 2002 had sky-high growth as the industry pulled out of a trough. PP end markets showing strong two-month growth included film (19 percent), transportation (14 percent) and caps/closures (12 percent).
Nylon resin sales jumped almost 8 percent in the first two months of 2003, with automotive and truck-related sales surging almost 13 percent, APC said.
That sales growth - combined with rising feedstock costs - allowed nylon makers to lift resin prices an average of 10 percent through April, according to several buyers contacted. The move, reflected in this week's Plastics News resin pricing chart, results in an average increase of 10 cents per pound on nylon 6 and 11 cents per pound on nylon 6/6.
``You see what's happening with oil and natural gas, and that affects [nylon] intermediates like butadiene and adipic acid,'' said Dave Flitman, North American business director for DuPont Co. of Wilmington, Del.
``We're coming out of a recessionary period and moving into a more balanced period,'' Flitman added. ``Our demand was up 10 percent in the first quarter. Automotive was really strong.
``We had some capacity down for about 18 months, but now it's back up because demand has returned. We've had some customers ask to buy in smaller amounts, but some have moved into bulk shipments.''
In PE, most producers are sticking with 5 cent-per-pound price hikes set for May 15. However, Chevron Phillips Chemical Co. LP of Houston has reduced the amount of its May 15 increase to 3 cents per pound. As of May 8, no other producer had followed suit.
North American HDPE, LDPE and LLDPE prices are up an average of 11 cents per pound so far in 2003. A 5 cent energy surcharge was removed April 1 but was replaced immediately with a previously announced, 5 cent general price hike.