Seasonal turbulence has hit North American markets for polystyrene and PET bottle resin, causing price increases that were won in June to be wiped out in July.
In each case, the average fluctuation amounted to 2 cents per pound, according to several PS and PET buyers contacted by Plastics News.
The PS change occurred as prices for benzene feedstock tumbled from $4 per gallon in June to $3.70 in July. Further price drops on benzene are expected in August, leading some PS buyers to expect the same to happen on PS resin.
North American PS operating rates are estimated at 80-85 percent, even with about 300 million pounds of capacity being closed in the past 18 months.
Through May, U.S./Canadian PS sales were down 2.5 percent, according to the American Chemistry Council in Arlington, Va. That drop occurred even with gains of 11 percent in export sales and 4 percent in sales of expandable PS.
Subtracting export sales leaves the U.S./Canadian domestic market with a sales loss of more than 3 percent. Sales also fell 3 percent in 2006, according to ACC.
Among PS end markets, food packaging provided a bright spot in the first five months of 2007, as sales grew almost 23 percent. That segment accounted for almost 12 percent of domestic PS sales in that period.
Market leader Nova Chemicals Corp. of Pittsburgh reported in late July that its North American solid PS sales were up 18 percent, to $285 million in the first half of 2007. That business also narrowed its first-half loss to $15 million after losing $23 million in the same period last year.
In PET, the up-2, down-2 trend in June and July was chalked up to an increasing amount of material becoming available from Eastman Chemical Co., DAK Americas LLC and Invista. Each firm has added capacity in recent months, although industry sources said those projects are not at full operating rates because of difficulty in acquiring isophthalic acid feedstock.
North American PET operating rates currently are estimated at around 85 percent. Buyers contacted by PN said there's a good chance prices will drop further in August as beverage suppliers head into the lower-demand fall season. North American PET sales are expected to be up 8-10 percent in 2007.
The PET field was rocked in July by news that M&G group plans to build a single-line, 1.8 billion-pound-capacity plant at an undisclosed U.S. location. About 1.4 billion pounds of that amount is expected to be available in the first half of 2009, according to officials with Tortona, Italy-based M&G.
``M&G has decided to take a stance and build here because they have technology where they can make money on conversion costs,'' said Edgar Acosta, a market analyst with DeWitt & Co., a consulting firm in Houston. ``They want to license their technology to other producers, and [a North American plant] will go a long way to meeting that goal.''
M&G's EasyUp-brand PET process technology currently is being used at a 1 billion-pound-capacity plant that opened earlier this year in Suape, Brazil. Acosta said the technology can offer 25-30 percent efficiency advantages compared with older PET plants.