Fighting off winter's chill, polypropylene prices plowed forward another 4 cents per pound in December.
A number of buyers were skeptical that the increase would take hold, but demand stayed unseasonably strong throughout the month, enabling the hike to stick.
Average per-pound selling prices were up 26 cents in 2004. On homopolymer injection molding grades, that works out to an increase of about 50 percent.
``When's the last time you saw a [PP] price increase in December?'' asked a Chicago-area PP buyer. ``There are a lot of people pre-buying [to avoid further increases]. Resin makers will say they're not letting that happen, but they are.''
Craig Blizzard, PP sales director for Basell Polyolefins of Elkton, Md., said sales in the first part of December in particular were stronger than usual.
``The economy was generally strong, and there were pretty slim inventories all around. Processors weren't able to not buy,'' he said.
Through October, U.S./Canadian PP sales for 2004 were up almost 7 percent, with U.S. sales up more than 5 percent, according to the American Plastics Council in Arlington, Va. Big gains were posted in injection molded cups and containers, extruded sheet, nonwoven textiles, and in sales to resellers and compounders.
PP makers were trying for another nickel as of Jan. 1, but the Chicago-area buyer had his doubts that the run would continue.
``The feedstock push has peaked and the supply/demand push is peaking,'' he said. ``Throw in the effects of the tsunami in Asia and less production because of the Chinese New Year in February, both of which should reduce resin consumption, and it might be hard to raise prices again.''
But he admitted that suppliers probably won't see it that way. After a couple years of losses and low margins, ``they won't stop until they hit a brick wall,'' he said.
In feedstocks that affect PP pricing, natural gas was trading Jan. 3 for about $5.55 per million Btu - a drop of about 12 percent from a year ago. West Texas intermediate crude oil was selling for just under $44 per barrel, marking a one-year jump of about 29 percent.