Average selling prices for North American suspension PVC, PET bottle resin and solid polystyrene have fallen since Feb. 1 - but buyers said markets for those materials have tightened in March.
Prices for PVC and PET each slipped by a penny in February, while PS prices tumbled an average of 3 cents.
Some PVC buyers reported seeing the penny drop in January and were striving for the second penny in February, but this group made up a minority of the market. The Plastics News resin pricing chart is showing January prices as flat and February numbers down 1 cent.
Makers of PVC now are trying to raise prices 3 cents per pound, with increases effective March 1. Buyers contacted by Plastics News said they expect at least part of that increase to be successful, as stronger construction activity has improved demand in that sector, which dominates the PVC market.
``Residential construction is still pretty weak, but commercial work - which uses larger-diameter pipe - is picking up,'' an East Coast-based PVC buyer said. ``And you have to put the residential numbers in perspective. If we have 1.6 million housing starts this year, it won't look good compared to the 2.1 million we had last year, but 1.6 [million] is still a very good year.''
The U.S./Canadian PVC market is working to recover from a 2006 year in which sales fell 3 percent, to about 14.9 billion pounds, according to the American Chemistry Council in Arlington, Va. Siding-related sales fell almost 10 percent in the region during 2006.
PET bottle resin demand also stayed a bit soft in February, as buyers held off on building inventory ahead of the summer months, when beverage consumption peaks. Producers are working on increases of 5 cents per pound effective March 1, and 4 cents per pound effective April 1.
Market watchers reported production issues at an Invista plant in Canada and at an M&G Group plant in Mexico. Those situations could act to tighten supply.
``What we're seeing now with these increase attempts is completely based on raw materials,'' said Edgar Acosta, an industry analyst with DeWitt & Co. Inc. in Houston. ``Buyers are only buying as much as they can afford.''
The PS tumble came just before producers issued increases of 4 cents per pound effective March 1. Those attempts could be helped out by an increase in contract prices for benzene feedstock, which jumped from $3.20 per gallon to almost $3.60.
The U.S./Canadian PS market is showing ``small signs of improvement,'' according to Peter Feng, a market analyst with Chemical Market Associates Inc. in Houston. Regional sales were down almost 3 percent in 2006, according to ACC.
Feng added that regional PS capacity could be tightened by plant closings initiated by Dow Chemical Co. and Nova Chemicals Corp. in 2006.
``The [PS] market was fairly long before, so some adjustment needed to be made,'' he said.