Stop us if you've heard this one before: U.S./Canadian polypropylene prices went up in October.
The PP market absorbed 3 more cents' worth of per-pound increases as red-hot oil and natural gas prices, coupled with continued strong demand and high operating rates, left buyers with little choice but to pay up.
The October move puts the total price increase for 2004 at 19 cents per pound - a jump of almost 40 percent on injection molding homopolymer PP.
``It's all across the board,'' a Pennsylvania-based PP buyer said of the October move. ``Now oil is back under 50 [dollars per barrel] and [PP] suppliers are talking about less propylene monomer being available.''
The buyer added that although demand for his firm's products is up in 2004, there's ``an elasticity'' in the market as far as how many more price increases his own customers would be able to pay.
Other buyers echoed the sentiment, saying lag times between when their resin prices go up and when they can increase their own selling prices have left them playing catch-up this year.
However, buyers also reported an increased availability of PP in September and October, making some hopeful that increases of 3 cents per pound nominated for November and 4 cents per pound nominated for December might lose some steam.
Through August, U.S./Canadian PP sales were up almost 9 percent vs. the same period in 2003, according to the American Plastics Council in Arlington, Va. Not including explosive growth of 23 percent for export sales still leaves the domestic market with a healthy growth rate of 7 percent.
Export sales accounted for about 11 percent of total U.S./Canadian PP sales through August.
On the end-market front, PP sales into rigid packaging - including cups, containers, caps and closures - continued to outpace the overall market with a growth rate of 10 percent. Sales into spun-bonded fibers also were up 10 percent.
PP sales to resellers also continued to boom, surging 21 percent to 1.3 billion pounds through August. In that period, sales to resellers accounted for almost 11 percent of the total U.S./Canadian PP market.