The normally slow winter months have been turbulent for commodity resin prices in North America.
Although buyers and producers tend to hibernate at this time of the year, that hasn't been the case in late 2011 and early 2012, as buyers have reported price movement on PET bottle resin, polypropylene, PVC and solid polystyrene.
Prices for PET and PP both fell in December, with PET sliding an average of 5 cents per pound and PP dipping an average of 2 cents. Lower seasonal sales volume contributed to lower prices for both of those materials, buyers said.
The 5-cent drop on PET means that regional prices finished 2011 with a net gain of 5 cents, or about 6 percent. Some buyers are expecting pricing for the material to become more stable, with recent consolidation resulting in fewer major producers in the region.
For PP, the 2-cent drop ended an extremely volatile year in which prices shot up an average of 37 cents in the first half before falling 41 cents by year's end. The 4-cent net loss left prices down about 4 percent for the year.
Pricing volatility and an increase in imported finished goods made from PP was reflected in North American sales totals for the material. Through October, domestic demand was down almost 5 percent vs. the year-ago period, according to the American Chemistry Council in Washington. A drop of almost 22 percent in export sales left overall PP sales in the region down 6 percent for that 10-month period.
The increases seen in markets for PVC and solid PS both have occurred since Jan. 1. PVC prices had climbed about 8 percent during 2011, while solid PS prices finished the year up almost 11 percent.
PVC prices were up an average of 3 cents per pound in January, with producers citing higher spot prices for ethylene feedstock and buyers seeing demand rise slightly from low levels. Ethylene availability also could be affected by a scheduled maintenance turnaround taken by Dow Chemical Co. at its St. Charles plant near Hahnville, La., according to the PetroChem Wire LLC consulting firm in West Orange, N.J. An ethylene unit at Shell Chemical Co.'s plant in Norco, La., also remained down for maintenance.
A Texas-based PVC buyer said his firm has seen improved demand for industrial and infrastructure PVC products, but demand from the residential housing sector — PVC's traditional sales base — remains weak.
“We're seeing some big, isolated purchases on some construction projects, which we weren't seeing last year at this time,” he said.
Regional PVC sales actually grew almost 3 percent in the first 10 months of 2011, according to ACC, but 18 percent export growth masked a drop of almost 5 percent in domestic demand.
Houston-based Westlake Chemical Corp.'s attempted takeover of Georgia Gulf Corp. in Atlanta could have a big impact on the North American PVC market. The combined firm would rank as the region's second-largest PVC maker and would reduce the number of major players in the market from five to four.
In solid PS, prices for general-purpose and high-impact material each fell an average of 2 cents per pound in December before general-purpose PS went up 5 cents and HIPS climbed 7 cents in January. The difference in increases was the result of higher prices for butadiene feedstock used in HIPS.
The uptick largely was the result of higher prices for benzene feedstock, since demand remained seasonally weak. Benzene prices shot up almost 25 percent to $3.70 per gallon. That increase was more than was expected by some market watchers, including Wilf Kimball, a market analyst with Plaza Group in Houston.
“The domestic demand for both cumene and styrene do not support this pricing,” he wrote in a recent benzene report. “Barring any significant crude oil pricing changes, we do not see benzene exceeding the $4 ceiling going forward.”
Regional PS makers now are seeking similar price increases for Feb. 1 — 5 cents on general-purpose PS and 7 cents on HIPS.