With demand softening late in the year, average selling prices for PET bottle resin, solid polystyrene and polycarbonate have tumbled.
PET prices have tumbled an average of 8 cents per pound since Sept. 1, with most of that erosion in October, according to buyers contacted by Plastics News. Further price drops are expected by year's end. Prices had climbed an average of 13 cents per pound between March and September.
The late-year swoon can be chalked up to drops in energy prices, which in turn drove down prices of PET feedstock paraxylene, according to Edgar Acosta, a market analyst with the DeWitt & Co. consulting firm in Houston.
The North American market also is absorbing new capacity, with still more on the way, Acosta added. Between mid-2006 and mid-2007, North American PET capacity will have increased by 20 percent, including a 770 million-pound-per-year addition by market leader Eastman Chemical Co. in Columbia, S.C.
Acosta also cited standard seasonal slowdowns in demand and a reduction of exports from North America to South America because of anti-dumping measures as reasons for the recent price drops.
In solid PS, prices have dropped an average of 6 cents per pound since Oct.1, according to buyers contacted. Plastics News also is increasing the amount of the price increases won between May and September from 6 cents to 10 cents. The result of those two moves is a drop of 2 cents vs. prices shown on last week's PN resin pricing chart.
``Polystyrene demand hasn't been strong and there's been some crossover with polypropylene,'' said market analyst Lowell Huovinen at Resin Technologies Inc. of Fort Worth, Texas. ``The cutlery makers can swing from material to material on short notice, and they have enormous volume.''
Buyers also are expecting more potential decreases in December. Contract prices for PS feedstock benzene are expected to be under $3.50 per gallon in December after being around $4 in October.
PS is ``a mature market,'' RTI's Huovinen added. ``Unless some new application comes along to change the dynamics of the market, it's not going to grow that much or decline that much.''
At PS market leader Nova Chemicals Corp. of Pittsburgh, North American PS sales volume in pounds dropped more then 8 percent in the first nine months of 2006 vs. the year-ago period. Nova's Styrenix business unit, including PS and styrene monomer, posted a nine-month loss of $119 million. The unit lost $147 million in the same period last year.
PC prices have slumped an average of 10 cents per pound since June 1, after already tumbling a combined 10 cents in late 2005 and early 2006.
``What's happening [in PC] is that demand has been strong, but there's oversupply,'' said Greg Smith, a market analyst who's with RTI. ``We estimate that global demand increased between 6 and 7 percent both in 2005 and 2006, but that supply increased 10 percent in each of those years as well.''
``A lot of capacity has been added in Asia, but GE Plastics also added a lot in Spain.''
CD sales, a big driver of optical-grade PC, are down in North America as consumers are favoring music downloaded from the Internet.