Unrelenting pressure on energy feedstocks has catapulted average per-pound selling prices for solid polystyrene and nylon resins higher since early May.
After seeing an average of 11 cents in per-pound increases take hold through April, solid PS buyers have experienced 3 more cents of upswing and are looking at 4 more cents possibly taking effect this month.
All signs point to benzene, a chemical feedstock used to make styrene monomer, as the reason for the PS price increases.
Contract benzene prices were around $2.50 per gallon in late June, with spot prices exceeding $3 at various points. A year ago, prices for benzene were around $1.25 per gallon. No significant benzene capacity was added globally from 2001-03, meaning even modest demand tightens an already tight market.
On the U.S./Canadian sales front, PS was roughly flat in the first four months of 2004 compared with the year-ago period. Domestic sales were up almost 1 percent, but export sales slumped more than 8 percent, according to the American Plastics Council in Arlington, Va.
Among major PS end uses, food service was up almost 1 percent through April, but food packaging was down almost 7 percent and consumer/institutional products were off more than 9 percent.
In nylon, price increases totaling roughly 10 percent have taken hold since the start of the year. Nylon maker BASF Corp. of Mount Olive, N.J., also has a further increase of 6 cents per pound on the table for most of its nylon resins, effective July 1. Benzene also has played a role as a precursor to nylon feedstock cyclohexane.
``Further increases in benzene and energy costs have resulted in unsatisfactory margins,'' BASF nylon marketing and sales director Mark Dobson said in a recent news release.
``The raw material and energy markets remain highly volatile and a great deal of uncertainty still exists regarding future costs to produce nylon.''
North American nylon sales were up more than 4 percent through April, according to APC. A drop of 16 percent in sales to the automotive/truck market was more than offset by a 45 percent boom in sales to resellers, distributors and compounders. That end segment accounted for almost 30 percent of domestic nylon sales in the first four months of 2004.