There doesn't seem to be a year-end slowdown in sight for the polypropylene market, as buyers and producers reported 3 cent-per-pound price increases taking hold in November.
In late October and early November, some buyers had reported signs that more material was available, lending hope that the North American market had seen its last price increases for the year. But whatever surplus there may have been quickly dissipated, leaving the latest 3 cents in place.
Average per-pound selling prices now are up 22 cents in 2004. On injection molding grades of homopolymer PP, that works out to an increase of about 46 percent.
Industry operating rates of above 90 percent have tightened PP supplies, as has a domestic demand growth rate of 6 percent through September. U.S./Canadian PP export volume increased by 20 percent in that period as well.
Through September, more than 1.5 billion pounds of U.S./Canadian PP had been shipped out of the region, according to the American Plastics Council in Arlington, Va. That number represents almost 11 percent of total U.S./Canadian PP sales.
PP makers again are pointing to high feedstock costs as a driver behind the year's astronomical price hikes. As of Nov. 22, West Texas crude oil was trading at $48.50 per barrel, up 62 percent from a year ago. Natural gas was trading around $5.90 per million Btus, a more modest increase of 8 percent vs. a year ago.
Refinery giant Sunoco Inc. of Philadelphia cited ``record-high'' feedstock costs as reasons for higher prices and ``much improved results'' in its PP and phenol businesses.
The price increases ``reflect the progressively tightening supply and demand for [PP and phenol],'' Sunoco Chairman and Chief Executive Officer John Drosdick said in the firm's third-quarter financial news release. ``We expect this cyclical recovery to continue.''
Sunoco officials added that the firm's PP and phenol margins improved in the third quarter, with PP margins reaching 12.4 cents per pound. Sunoco's nine-month profit in PP doubled to $54 million when compared with the year-ago period.
PP makers now are working on increases of 4 cents per pound set for Dec. 1.
Elsewhere, selling prices for amorphous and crystalline PET and expandable polystyrene also continued to rise, according to buyers. APET/CPET prices, already up an average of 6 cents per pound in the first half of 2004, are up another 8 cents per pound since July. Tight supply conditions for feedstocks ethylene glycol, paraxylene and purified terephthalic acid have been behind the spike.
In EPS, early-year increases of 9 cents per pound have been joined by a torrent of 20 cents in additional increases since July, buyers said. The move leaves average selling prices for cup-grade EPS up about 30 percent on the year. Availability issues surrounding benzene feedstock needed to make styrene monomer have driven the EPS market through the roof.
Core EPS demand also has boomed in 2004. Through September, U.S./Canadian EPS demand was up almost 12 percent, according to APC. EPS accounted for about 16 percent of total market sales in that period, while chipping in 25 percent of overall PS volume growth.
Also this week, Plastics News is adjusting prices for all grades of high density polyethylene upwards by 1 cent per pound on our weekly resin pricing chart. Earlier reports indicated the November increase was coming in at 5 cents rather than 6. But later follow-ups with pricing sources indicated there had been some confusion because of the multiple increases and announcement letters that PE makers have issued this year.