Makers of suspension PVC and solid polystyrene have reversed summer pricing slides with successful price increases that took hold in September.
Average selling prices for each of those materials climbed 2 cents per pound in the United States and Canada during June, according to buyers and sellers contacted recently.
PVC demand ``picked up dramatically between late spring and early fall,'' said Dick Heinle, PVC business director for Formosa Plastics Corp. USA in Livingston, N.J. ``There was a lot of late activity in the construction market, which was a little unexpected. We had thought construction activity would be more level.''
Formosa also has announced 2 cent-per-pound increases for Nov. 1 and Jan. 1. Heinle said those proposed increases partly are intended to offset energy costs, which Formosa expects to rise during the winter months.
``This is all about margin improvement [for PVC makers],'' a Texas PVC buyer said of the September move. ``Supply isn't a problem.''
A Midwestern PVC buyer said the September increase took hold because ``the pipe guys came back into the market.''
PVC's dominant pipe segment was buoyed by a strong housing market, where the Commerce Department reported residential spending climbed 1.4 percent in August. Analysts attributed that rise to homebuilders attempting to access low interest rates before they go up again.
In PS, the increase was warranted because of ``continued escalation'' in feedstock costs, according to Rick Salvador, PS business leader for Nova Chemicals Corp. of Pittsburgh.
``We had seen some erosion in pricing over the summer, but recently crude oil prices were up and that's driving [PS feedstock] benzene up again,'' Salvador said. ``Demand is also better than it's been in a while, and there's been general improvement in the market.''
An East Coast PS buyer said his firm had to take the increases, even though sales of its products are down from 2002.
PS suppliers ``just keep saying they need to improve their margins,'' the buyer said. ``It wouldn't surprise me if they try to raise prices again before the end of the year.''
U.S./Canadian PVC sales were down almost 7 percent through July, according to the American Plastics Council in Arlington, Va. U.S./Canadian PS sales dipped almost 7.5 percent in that same period.
Taking into account price increases earlier this year and later-summer price erosion, average per-pound selling prices of pipe-grade suspension PVC are up 18 percent this year, while prices of injection molding grades of high-impact PS are up about 14 percent. Those changes are reflected in this week's Plastics News resin pricing chart.
