Makers of polypropylene, polystyrene and PET did not relax at the end of 2009 and, as a result, were able to bump up prices before the year ended.
PP prices are up an average of 4 cents per pound since Dec. 1, bringing the total November-December increase on that material to 7 cents. PS prices have climbed an average of 2 cents per pound since Dec. 1, for a November-December total of 4 cents.
In PET, prices rebounded from a 3-cent drop in November to catapult an average of 5 cents in December. For each of these three resins, feedstocks paved the way for price increases, since demand stayed lethargic, as it was for most of 2009.
The PP market remained subject to the whims of propylene monomer feedstock. Supplies of that material have remained tight, since lower-priced natural-gas-based ethane feedstocks are being used to produce propylene. Ethane is more affordable, but produces less monomer than crude-oil-based naphtha feedstock.
Market sources contacted by Plastics News expect that supply situation to endure at least through the first half of 2010. The December increase capped a tumultuous year for PP in which prices shot up an average of 35 cents per pound or 63 percent after bottoming out in late 2008. The market was characterized by a 12-cent September leap that was followed by a 10-cent plunge in October.
North American supplies of PP could increase as higher prices reduce opportunities to export from the region, sources said. Buyers contacted by Plastics News said regional supply was not affected much by a brief force majeure situation at a Formosa Plastics Corp. USA plant in Point Comfort, Texas.
North American PP makers now are seeking increases of between 5 and 7 cents per pound effective Jan. 1.
Prices for PS also edged upward as costs of benzene feedstock surged, lifting numbers for styrene monomer as well. Benzene reached nearly $3 per gallon in December, after being as low as $2.60 two months before.
There were some [styrene] production turnarounds and some plants were out, said Greg Smith, a PS market analyst with Resin Technology Inc. in Fort Worth, Texas. As a result, monomer got tight.
North American PS makers now have a pair of increases on the table for January one of 5 cents for Jan. 1 and another of 4 cents for Jan. 15. Chances of these increases being successful have increased since benzene prices for January closed at $3.55 per gallon, a month-to-month jump of more than 18 percent.
PS prices also rose steadily throughout 2009 after the late-2008 crash. For full-year 2009, North American PS prices rose an average of 15 cents or 22 percent.
In PET, prices are up an average of 5 cents per pound since Dec. 1, after taking a feedstock-related 3-cent tumble in December. The increase was linked to upward pricing pressure on feedstocks ethylene glycol and purified terephthalic acid, sources said.
Even with the increase, North American PET makers have been unable to pass on the full impact of the feedstock moves, according to Mike Dewsbury, a PET market analyst with RTI.
But with raw materials moving, [PET makers] have no other option than to try to raise prices, he said.
Regional PET makers now are seeking increases of 4 cents per pound for Jan. 1, and 7 cents per pound for Feb. 1.
Industry sources said regional supply has been increased by Eastman Chemical Co. restarting production after a maintenance outage at its plant in Columbia, S.C. Indorama Group also is continuing to increase production on a line it started up last year in Decatur, Ala., sources said.
For full-year 2009, regional PET prices rose an average of 11 cents per pound or 18 percent after bottoming out in late 2008.
Through the first nine months of 2009, North American sales of PP were down 4 percent vs. the year-ago period, according to the American Chemistry Council in Arlington, Va. Sales of PP within the region were down almost 11 percent, with exports up almost 70 percent.
In the same period, U.S./Canadian PS sales were down 13 percent, with sales within the region down 13 percent and export sales down only 10 percent.
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