2016 a good year for PVC sales; PP, PS also see slight increases

PVC resin sales in the U.S. and Canada enjoyed solid growth in 2016, while North American sales for polypropylene and polystyrene resins saw slight upticks.

Full-year sales for PVC in the U.S. and Canada were up 4.4 percent to more than 15.3 billion pounds, according to the American Chemistry Council. Domestic sales were up 3.7 percent, with exports up 5.7 percent.

Domestic PVC sales into the rigid pipe and tubing end market were up almost 5 percent, to more than 4.7 billion pounds, accounting for 45 percent of all domestic sales. Other PVC end markets posted large gains in 2016 included film and sheet (up 16 percent), extruded windows and doors (almost 17 percent) and fencing and decking (18 percent).

Construction-related uses accounted for more than 63 percent of U.S./Canadian PVC sales in 2016. U.S. housing starts grew almost 5 percent in 2016 to just under 1.17 million. That marked the seventh straight annual increase for the market, which had bottomed out at 554,000 in 2009. U.S. housing starts had been as high as 2.07 million in 2005.

“2016 was a solid year all around for the U.S. housing market, as interest rates remained at historically low levels,” said Phil Karig, managing director of the Mathelin Bay Associates LLC consulting firm in St. Louis. “Housing starts were up, housing sales were up, remodeling and renovation spending was up and PVC production, not surprisingly, was up along with them.”

North American PP sales ticked up 0.4 percent for the year to almost 17.3 billion pounds. Domestic sales fell 2.5 percent, with exports surging up 114.8 percent.

The only sizable domestic PP end market to show growth was injection molded cups and containers, where sales were up 2.4 percent. Among other large PP markets, sales into injection molded housewares were down 8 percent, sales into film were down 9 percent and sales into fiber/filaments were down 12 percent.

“Although PP imports to the U.S. have slowed recently, the overall level of imports in 2016 was still substantial enough to push overall domestic resin sales growth to near zero for the entire year,” Karig said. “And while exports have increased as imports have tailed off, it's important to remember that much of U.S. exports remains close to home within the NAFTA area.”

“A breakout year [for PP] in 2015 with 5.3 percent growth led to a tight market and producer pricing power in 2016,” said Scott Newell, a market analyst with Resin Technology Inc. in Fort Worth, Texas. North American PP makers “ultimately priced themselves right out of the market, with imports stealing a big chunk of market share,” he added.

“Producers fought hard to win back market share and are poised for a better 2017,” Newell said. “However, domestic converters are again priced out of the market, only this time it's because of a volatile monomer market.”

North American PS sales in 2016 nudged up 0.2 percent to slightly less than 4.4 billion pounds. Sales into the food service/food packaging end market grew 1.3 percent. That sector accounted for almost 63 percent of regional PS sales in 2016. Expanded PS is not included in that total.

“I wouldn't say that there was growth in the PS market in 2016,” said Robin Chesshier, a RTI market analyst. “Food packing/services were OK, but the other markets are all down. Food and medical packaging continues to grow in general, so I'm not too surprised to see that.”

Karig said PS volume growth “remains anemic, even in the food packaging area, since PS sales in 2016 actually grew more slowly than the overall growth in the packaging market.”

“PS continues to face stiff competition from competing resins such as PP and PET that are continuing to make inroads on the basis of cost or perceived ease of recycling,” he added.