PVC prices moved up 2 cents in August after being flat in July. Prices for the material had been up 1.5 cents in June. Prices now have increased 24.5 cents so far in 2021 and a net of 40 cents since January 2020.
The construction market, which accounts for around 60 percent of U.S./Canadian PVC demand, has been particularly strong in 2021. U.S. housing starts were at an annual rate of 1.64 million for July, according to the Census Bureau. That number is up 3 percent vs. June, and up 6.5 percent vs. July 2020, when the COVID-19 pandemic was having more of an impact on construction activity.
The regional PVC market could see the impact from Ida, with major plants operated by Shintech Inc., Formosa Plastics Corp. USA and Westlake Chemical Corp. all being shut down for periods of time. A major Shintech PVC unit in Freeport, Texas, also was closed because of a lack of vinyl chloride monomer feedstock from supplier Olin Corp.
Sources said that Shintech's plants in Plaquemine and Addis, La., were in the process of restarting as of Sept. 16. A lack of nitrogen needed for restart procedures also was affecting production schedules, they added.
As a result of this market tightness, some PVC makers have increased a 2-cent price hike attempt for September to 7 cents. Reduced demand as construction season slows down could reduce the chances of the larger attempt being successful.
Regional PS prices reversed course in August, increasing by 8 cents after tumbling 10 cents in July and 8 in June. PS prices again followed benzene feedstock, which is used to make styrene monomer. North American PS prices now are up a net of 30 cents so far in 2021.
Benzene prices in August were up 46 cents to $3.55 a gallon, a gain of almost 15 percent vs. July. Market sources said that in spite of the August increase, regional PS production now is running ahead of demand.
Ida's primary impact on the PS market is the closing of TotalEnergies' massive resin plant in Carville, La. That 1.4 billion-pound-capacity unit represents about 25 percent of all U.S. PVC capacity. Styrene plants in the area operated by Americas Styrenics and Cosmar Co. also were out of commission.
Sources said that the TotalEnergies PS plant was in the process of restarting as of Sept. 16, but that higher PS prices for the month remain a strong possibility.
The polyethylene battle was fought throughout August, with a big July inventory build ultimately scuttling a 5-cent price hike that had been attempted. That hike had a chance to go through on high density PE right through the first week of September until producers pulled it back after resistance from buyers.
PE supplies for September could be affected by reduced production at plants operated by Dow Inc. and ExxonMobil Chemical in the wake of Hurricane Ida. Hurricane Nicholas — a weaker storm that made land Sept. 14 — knocked out power and resulted in the closing of an HDPE unit operated by LyondellBasell Industries in Bay City, Texas.
A LyondellBasell spokesperson said Sept. 16 that the Bay City plant, known as the Matagorda Complex, safely shut down Sept. 14 because of power outages. Power has been restored and the firm "has initiated startup procedures" for the plant.
Regional PE prices had been up 5 cents in July, and demand has remained reasonably strong. Prior to the August hike not passing, PE prices had increased for eight consecutive months. Producers now are seeking a 5-cent hike for September, although sources were doubtful that move would be successful.
Most regional PE prices are up 43 cents so far in 2021 and 63 cents since January 2020. High density PE prices are 2 cents less.
In PET, prices were flat in August after rising 2 cents in July. Prices also had been flat in May and June. The lack of higher prices was somewhat surprising to some market watchers, since summer months bring stronger demand from the beverage market which leads the PET field.
Prices are now up 14 cents so far in 2021. Market sources said PET prices in July were affected by higher prices for purified terephthalic acid (PTA) and monoethylene glycol (MEG) feedstocks.
The Ida impact for PET could come from the shutdown of a resin plant operated by DAK Americas in Bay St. Louis, Miss. That situation and higher raw material costs could cause PET prices to edge higher in September.
Higher prices for natural gas and, to a lesser extent, crude oil could impact PE and PVC resin prices in September. Natural gas is used as the primary North American feedstock used to make the ethylene that's used in those resins.
Natural gas in particular has surged, jumping almost 12 percent in August to close at $4.37 per million British thermal units. By Sept. 16, that price was up almost 25 percent to $5.46, its highest level in almost three years.
West Texas Intermediate oil closed August at $68.50 per barrel — a drop of more than 7 percent for the month — but had rallied a bit to $70.46 on Sept. 16, a gain of almost 3 percent for the month in progress.