Continued late-year demand once again has lifted prices for PVC and polystyrene resins.
Buyers and sellers recently confirmed that average per-pound selling prices for suspension PVC climbed another cent in November, placing prices for pipe-grade material up 12 cents - or 30 percent - for the year.
Continued strength in the housing market was chalked up to warmer-than-normal temperatures in the Midwest and Northeast, allowing building to continue past a point when it would normally slow. Construction-related sales account for about 60 percent of all PVC sales.
But in the midst of this housing boom, the National Association of Home Builders - a leading trade group - has predicted that housing starts will fall more than 4 percent in the United States next year. That drop will include a decrease of more than 5 percent in sales of new single-family homes.
``The housing market has been nothing short of phenomenal,'' NAHB chief economist David Sieders said in a recent news release. ``But it's in the process of reaching its limits and topping out.''
PVC sales through September give no hint of a slowdown, though. Overall domestic market demand in the United States and Canada was up almost 7 percent in that period, according to the American Plastics Council in Arlington, Va. Sales into rigid pipe and tubing were up a similar amount, while sales into siding and related uses were up almost 12 percent. Sales into extruded windows and doors skyrocketed more than 33 percent.
Strong demand for PVC feedstocks such as natural gas and crude oil have driven the price hikes. West Texas intermediate crude was selling at about $41.50 per barrel on Dec. 7, about 30 percent above its year-ago mark. On the other hand, natural gas was heading in the opposite direction, trading at about $6 per million Btu on Dec. 7. That's about 8 percent less than where the material was a year ago.
Market watchers said the natural gas decline might make it more difficult for PVC makers to implement price increases of 2 cents nominated for Dec. 1, and 2 cents nominated for Jan. 1.
In PS, the ultratight market for benzene allowed producers to raise prices another 8 cents per pound in the September through October period. That leaves North American prices up a total of 30 cents for the year, or an increase of a little more than 50 percent on injection molding grades of high-impact PS.
Prices for benzene - a feedstock used to make styrene monomer - shot as high as $4 per gallon earlier this year, but were around $2.60 in early October. That price, however, remains far above the material's historic average of between 80 cents and $1.20 per gallon.
Through September, U.S./Canadian PS sales were up more than 6 percent, APC said. Domestic market sales were up by a similar amount, led by an increase of almost 12 percent in expandable PS. Sales into major appliances also were up 7 percent, while sales to resellers and distributors of prime PS were up almost 9 percent.
