North American PVC resin prices kept chugging upward in March and April, while prices for polystyrene were beset with confusion resulting from a slew of pricing-related announcements from PS makers.
PVC prices ticked up 2 cents per pound in both March and April and now are an average of 8 cents higher than they were at the start of the year.
``The costs to make PVC have gone up significantly because of high energy costs,'' said Barry Hendrix, PVC business director for market leader Oxy Vinyls LP of Dallas. ``PVC pipe is being consumed at a healthy pace, but overall [2003 PVC] demand appears to be down because there was a lot of extra resin shipped in December when [buyers] were trying to beat price increases.''
Overall U.S./Canadian PVC sales were down 2 percent in the first two months of 2003, according to the American Plastics Council in Arlington, Va. Sales within the region were flat, while export sales - which made up more than 8 percent of total sales - were down more than 20 percent. Oxy Vinyls' own PVC production in the first quarter was slightly more than 1 billion pounds, a number that was virtually unchanged from the same period a year ago.
At Atlanta-based Georgia Gulf Inc., sales of chlorovinyls - including PVC - jumped 42 percent to $304 million in the first quarter of the year, but profit dropped 20 percent to $14.4 million. In a May 3 news release, Georgia Gulf officials cited high feedstock costs and a computer-related production outage at its Plaquemine, La., plant as reasons for the profit decline.
PVC makers now are working on an additional increase of 2 cents per pound to be effective May 1.
In PS, pricing data has flown fast and furious in recent months. As of mid-May, an average of 10 cents per pound in price increases had settled on the solid PS market in North America, although a number of buyers reported seeing 14 cents in total.
The April price increase of 4 cents seems to be a sticking point. Some buyers reported seeing it, while others still were negotiating. Major PS makers somewhat clouded the issue May 1 by removing a 4 cent-per-pound energy surcharge that had been in place since early March because of sky-high natural gas prices.
Several buyers reported PS makers were positioning the April increase to take the place of the surcharge, lifting the average increase up to 14 cents per pound. However, a majority of buyers contacted recently by Plastics News remained at 10 cents' worth of increases.
Adding to the PS confusion are attempts by PS makers to eliminate price protection, which had spared buyers from higher prices for as long as 90 days in some cases. Buyers said some PS makers are phasing out price-protection on a gradual basis, muddying the waters as to when increases actually are taking hold.
The variety of terms that the region's five major PS makers used to describe the energy surcharge - some labeled it a straight price increase - also seemed to be confusing some buyers, based on several interviews last week.
Through February, U.S./Canadian PS sales were up 4 percent, according to APC. Food-service-related end uses led the way, posting growth of almost 13 percent in that two-month period.