Inventory concerns and raw material pressures overcame low demand, allowing North American prices for polypropylene and polyethylene resin to climb since Jan. 1.
Per-pound selling prices for PP are up an average of 5 cents per pound since Jan. 1, according to several buyers contacted recently. Some buyers took a 3 cent hit in January and 2 cents in February; others saw it the other way around. Producers had been seeking a total of 10 cents per pound.
The increase reversed a slide that had seen PP prices drop almost 15 percent since Oct. 1. Demand ``is picking up across most end markets,'' said Craig Blizzard, marketing manager for PP market leader Basell Polyolefins in Elkton, Md.
The U.S./Canadian PP market is looking to rebound from a lackluster sales year in 2006. Through November, total sales were up less than 1 percent, according to the American Chemistry Council in Arlington, Va.
On Jan. 31, Sunoco Inc. of Philadelphia reported its 2006 PP sales volume in pounds was up about 1 percent to just over 2.2 billion pounds. Sunoco ranks fifth in the North American PP market with a 10 percent market share.
PP ``is still doing really well in packaging, but it's losing some volume in automotive,'' a Chicago-area PP buyer said.
In PE, prices have increased an average of 3 cents per pound since Feb. 1. This change affects all grades of high density, low density and linear low density PE on the Plastics News resin pricing chart. In a small number of cases, buyers of film-grade LLDPE saw an additional 2 cent increase in January because of shortages of hexene feedstock.
PE prices had fallen an average of about 22 percent since Sept. 1. PE makers had been seeking a 6 cent move, but demand wasn't strong enough to push the entire increase through. Suppliers are expected to delay the other 3 cents of that 6 cent attempt until March 1, with a separate 7 cent attempt moved back to April 1, sources said.
``They really got this one on sheer willpower,'' a Texas-based PE buyer said of the 3 cent hike. ``There doesn't seem to be a need for it; the producers are just saying they aren't getting the [profit] margins they want. Demand doesn't seem ... all that strong.''
Through November 2006, U.S./Canadian sales of HDPE were up 4 percent, while sales of LLDPE were up almost 3 percent and sales of LDPE were flat, according to ACC's plastics division.
At Equistar Chemicals LP of Houston, PE sales volume in pounds was up almost 4 percent in 2006 to more than 5.5 billion pounds. Equistar ranks second in North American HDPE and LDPE sales, and fourth in North American LLDPE sales, according to an industry estimate.
Both the PP and PE increases also were helped out by early-year inventory restocking, which stimulated demand, even if it did not result in more product made from those resins in North America, market watchers explained.
The PE jump also was bolstered by higher U.S. futures prices for natural gas, which is used to make 60-70 percent of North American PE. Those prices began the year around $5.50 per million Btu, but colder weather in the Northeast helped drive them as high as $9 earlier this month. Natural gas futures for April were around $7.39 in early trading Feb. 16.
Plastics News also is correcting average selling prices for thermoplastic elastomers on this week's resin pricing chart, based on higher demand and rising raw material prices dating to January 2006.
Prices for polyester-based TPEs - or copolyesters - now range from $3.50-$4.25 per pound. Prices for olefinic TPEs - or TPOs - now average between 80 cents and $1.35 per pound. Prices for TPOs do not include thermoplastic vulcanizates or thermoplastic polyurethanes.
In styrenic-based TPEs - or styrenic block copolymers - prices now cover a range between 90 cents and $2 per pound, according to buyers contacted recently.