Prices for solid polystyrene, suspension PVC and PET bottle resin are rebounding from year-end lows, while a recent hike attempt for polyethylene appears to have stalled.
Solid PS prices are up an average of 3 cents per pound since March 1, while suspension PVC prices have ticked up a total of 3 cents since Feb. 1, according to buyers contacted recently by Plastics News. Prices for PET bottle resin also have surged up 5 cents since Feb. 1. These changes are shown on this week's PN resin pricing chart.
Market analysts Greg Smith and Mark Kallman — both with Resin Technology Inc. in Fort Worth, Texas — said that early-year feedstock increases played a role in lifting prices for PS and PVC.
Prices recently rose for PS feedstock styrene monomer, even though precursor benzene saw prices fall from $1.35 per gallon in February to $1.29 in March, said Smith. The unusual move was the result of styrene monomer capacity being removed in North America and elsewhere. Some North American styrene also went into the export market, further tightening the amount of styrene available to make PS, he added.
Prior to the increase, North American PS prices had fallen about 40 percent after peaking in August. PS sales in the U.S. and Canada fell almost 11 percent during 2008, according to the American Chemistry Council in Arlington, Va. Domestic PS sales were down 10 percent in 2008, with exports slipping 14 percent.
PVC prices inched up 3 cents, even in the midst of a terrible housing market. Kallman cited early-year price increases on ethylene feedstock and export activity as reasons for the unexpected hike. North American PVC prices had fallen about 23 percent after peaking in August.
“There's also a little bit of re-stocking going on,” said Kallman. “But there's no life as far as true orders are concerned.”
PVC makers OxyVinyls and Georgia Gulf Corp. have announced plant closings since December, but Kallman said further shutdowns might not come until the second half of the year, if at all.
“We're going through a quiet period now, since [PVC] producers are waiting to see if second-quarter construction shows any life before making decisions on more shutdowns,” he said. Construction-related uses accounted for about 65 percent of U.S./Canadian PVC sales in 2008, according to ACC.
Regional PVC sales were down almost 12 percent in 2008, with sales into the dominant rigid pipe and tubing sector plummeting more than 21 percent. PVC exports provided a rare bright spot, with 2008 growth of more than 27 percent.
PET prices nudged up 5 cents per pound in recent weeks as price increases in purified terephthalic acid feedstock outstripped declines in prices for ethylene glycol feedstock, according to industry sources. But a Texas-based buyer said that PET market demand “still isn't looking all that good.”
North American market prices for PET had fallen about 35 percent after peaking in July. Regional PET supply will be impacted later this year when Indorama Polymers Public Co. Ltd. opens a billion-pound capacity plant in Decatur, Ala.
In PE, some producers reportedly have pulled back on a 5 cent-per-pound increase slated for Feb. 1. Buyers strongly resisted the move, which came on the heels of a successful 7 cent hike in January.
The 7 cent attempt also was weakened by declines in spot prices for ethylene feedstock that hit the market earlier this month. Those declines were caused in part by increased production at several ethylene units that had been offline since last fall in the Gulf Coast region.
Increased PE buying in the region during January apparently was price-based and not tied in to actual demand. Once buyers replenished their inventories, many of them stopped buying, sources said.
Regional PE prices had fallen 45 percent since peaking in July before the January increase. For all of 2008, U.S./Canadian sales of linear low density PE were down 7 percent, while high density PE sales tumbled 8 percent and LDPE sales belly-flopped 11 percent, according to ACC.