Market turmoil has affected average North American selling prices for PET bottle resin and ABS in recent months.
As a result, prices for both products are being adjusted on this week's Plastics News resin pricing chart.
PET prices tumbled an additional 15 cents per pound in December and January after dropping 10 cents total in October and November, industry sources said. The overall 25 cent decrease was caused by soft late-year demand and industry oversupply, and came after prices ran up 19 cents per pound in a three-month period starting July 1. That drastic run-up was caused by raw material outages stemming from Hurricanes Katrina and Rita.
However, blow molders and bottlers have started to build inventory in anticipation of higher summer beverage demand, leading to a price increase of 5 cents per pound since March 1. The net change to the PN pricing chart is a 10 cent downward move on PET bottle resin. The change incorporates both late-year price erosion in 2005 and the March 2006 increase.
Looking ahead, North American PET supplies will be affected by a midyear restart of capacity from Wellman Inc. in Bienville, Miss., and new capacity from Wichita, Kan.-based Invista in Queretaro, Mexico. Then in late 2006 or early 2007, more new capacity will arrive from Eastman Chemical Co., DAK Americas Inc. and Starpet Inc.
Overall, more than 3 billion pounds of new PET capacity will become available in North and South America by mid-2007, according to a recent report from Chemical Market Associates Inc., a consulting firm in Houston.
CMAI said it also expects about 450 million pounds of older capacity in the region to be rationalized during that time. The net new capacity might reduce North American PET operating rates from their current levels of 85-90 percent.
In ABS, prices shot up an average of 8 cents per pound in post-hurricane market moves but have tumbled an average of 12 cents per pound since that point. The result is a downward change of 4 cents per pound on the PN chart.
Early 2006 ABS demand remains soft, market sources said, but price pressure could be starting to build around benzene and styrene feedstocks, according to a recent report from DeWitt & Co., a Houston consulting firm.
North American ABS sales tumbled 9 percent in 2005, according to the American Plastics Council in Arlington, Va. Domestic sales of ABS and other specialty styrenics were down 7 percent, APC said.
The biggest end-market drop for ABS/styrenics in 2005 came in the electrical/electronics segment, where domestic sales slipped 31 percent.
Elsewhere on the PN pricing chart, prices for engineering thermoplastic grades of ABS also are being adjusted downward an average of 8 cents per pound to reflect market activity in 2005 and early 2006. Market prices for amorphous and crystalline grades of PET are being adjusted downward by 15 cents per pound as well.