Pricing volatility continues to rule the North American solid polystyrene market in 2011.
The material weathered a 4-cent-per-pound increase in February, only to drop 2 cents in April for a three-month net gain of 2 cents. That's in addition to a 6-cent move that took hold in January.
Now, prices look to be heading up again, since prices of benzene feedstock for May already have settled up by 35 cents per gallon — an increase of about 9 percent. Shortages of butadiene feedstock also are affecting pricing and availability of some grades of PS, buyers said. Regional PS makers have nominated increases for May ranging from 5-10 cents per pound.
Surprisingly, this heavy volatility hasn't done much to slow U.S./Canadian solid PS demand growth in the first quarter of 2011 — which had to be a welcome respite for producers that have seen demand for the material slide significantly in recent years.
For the quarter, sales were up more than 14 percent to more than 1.1 billion pounds, according to the American Chemistry Council in Washington. The domestic solid PS market fared even better, with growth of more than 17 percent. The overall growth number was reduced by a drop in export sales.
Stacy Shelly, a PS market analyst with Resin Technology Inc. in Fort Worth, Texas, said that price volatility and good demand for PS has created a tighter supply situation for the material, since PS makers don't want to source additional feeds at spot prices.
Also this week, Plastics News is correcting prices shown on its resin pricing chart for polycarbonate and amorphous and crystalline PET to reflect recent price increases.
In PC, higher feedstock costs — including benzene and butadiene — and some production issues have combined to lift prices an average of 15 cents per pound since Jan. 1. Combined with a 10-cent hike that took hold in late 2010, prices for that material now are up an average of 25 cents per pound in the last six months. That change is shown on this week's chart.
But pricing is not expected to have much impact on long-term PC demand. At a recent industry conference, PC market analyst Adrian Beale said that demand for the material is expected to grow from just under 8 billion pounds in 2010 to almost 10 billion pounds in 2015. Global PC operating rates are expected to increase from around 80 percent to almost 90 percent in the 2010-15 period, added Beale, who is with Chemical Market Associates Inc. in Houston.
For APET and CPET, prices are being corrected to show the impacts of feedstocks such as paraxylene and purified terephthalic acid. Higher prices for those and other materials also have driven up prices for PET bottle resin in recent years.