Pricing Update - April 2009

A short, sharp rebound in the first quarter called an abrupt halt to the long slide in commodity resin prices. However, there were signs last month that some hikes would be cut back or delayed indefinitely. With resin demand still weak, it all seemed to hinge on where monomer/feedstock prices were going.

 

PE HIKE ON HOLD?

Polyethylene prices held steady through early March, following implementation of a 7¢/lb increase. A 5¢ hike originally scheduled for February was delayed to March 1 and then to April for certain markets, according to industry observers. Meanwhile, the London Metal Exchange (LME) North American short-term futures contract in blown-film butene LLDPE for April rose to 35¢/lb from 34¢ in March.

Contributing factors: At press time, it was unclear if any or all of the 5¢ increase would be implemented. Resin capacity utilization is said to be below 70%, but that’s not the whole story. “Resin supply is reasonably tight, particularly for film grades, due to capacity cutbacks,” says Mark Quiner, editor at PetroChem Wire, Houston.

Ethylene monomer contract prices for February settled up 0.5¢/lb at 32¢/lb. But Quiner says monomer spot prices are a better indicator of the direction of PE price movement. He notes that spot ethylene prices rose 6¢ through February, peaking at 33.25¢/lb, as a result of planned and unplanned cracker shutdowns and logistical constraints. However, spot ethylene prices fell back sharply to 26.25¢ on March 10 as crackers restarted.

The very next day, spot ethylene dropped to 25¢/lb with futures trading at 21.5¢, according to Mike Burns, global business director for PE at resin purchasing consultant Resin Technology, Inc. (RTI) in Fort Worth, Texas. “We tell our clients that ethylene prices below 27¢/lb will not result in PE prices moving upwards.” Burns says North American PE prices are now competitive globally and he expects the 7¢/lb increase will stay in place, because resin suppliers need it to retain profitability. He sees the 5¢ increase as purely feedstock driven and unlikely to be implemented if ethylene prices continue to fall.

 

PP PRICES UP

Polypropylene prices generally moved up 6¢/lb in February, following a 2¢ increase in the previous month. A new price hike of 5¢ to 6¢ for March 1 also emerged. LME’s North American short-term futures contract in g-p injection-grade homopolymer in April dropped to 31¢/lb after rising to 33¢ in March.

Contributing factors: PP resin tabs followed the movement of propylene monomer. Propylene contracts moved up 6¢ to 28¢/lb in February, after January’s 2¢ rise, which was spurred by short supplies, owing to temporary cracker shutdowns and lower supplies from refineries. Quiner at PetroChem Wire says preliminary settlements for March monomer contracts indicated a 1¢ increase to 29¢/lb.

Scott Newell, RTI’s director of client services for PP, does not see any chance of another PP price hike. “Secondary resin markets have loosened up and prices are coming down. While the second quarter might see some increase in demand over February’s all-time low, it is still likely to show declines in PP consumption, except perhaps in food and beverage packaging.”

 

PET PRICES UP, TOO

PET prices moved up 4¢/lb in February, after a precipitous drop in the fourth quarter and January. A 5¢/lb price hike for March 1 was still on the table.

Contributing factors: PET tabs had followed declining prices of paraxylene and ethylene glycol feedstocks, but suppliers say there was an “overcorrection” of about 4¢/lb. Says a source at one major PET maker, “Starting from last July, feedstock prices dropped a total of 32¢/lb while PET prices fell 36¢/lb.”

Implementation of the March price hike was uncertain at press time. A seasonal upswing for PET typically starts in March, in anticipation of strong second-quarter beverage demand. But PET sales in February and March rose only marginally—about 2% to 3%. “We did not see the normal upswing this March, but there is an uptick in single-serve beverage sales at convenient stores as gas prices have dropped,” says one resin supplier.

PET plant utilization reportedly is in the low 70% range. The only scheduled new capacity—from Indorama’s Alpha-Pet subsidiary in Decatur, Ala.—will equal the permanent shutdowns of PET capacity by Invista and Wellman that have already taken place. However, there are industry reports that a new 800- to 900-million-lb production line at StarPet in North Carolina will start up as soon as June, rather than by the year’s end as originally planned.

 

PVC HIKES SPLIT

PVC resin producers ended up splitting the February 5¢/lb increase after Georgia Gulf announced that it was delaying 2¢ of that hike to March 1. As of mid-March, Georgia Gulf and OxyChem had announced a further 3¢ increase for April 1.

Contributing factors: Attempting a price increase in the face of very weak demand, at a time when ethylene monomer prices are expected to soften, sounds like a long shot. Some monomer capacity that had been shut down was scheduled to come back up in March, so ethylene pricing is expected to be weak. Contract ethylene settled at 32¢/lb in February, while spot prices in mid-March were at 31¢. According to the American Plastics Council, resin producer operating rates in January were only 64%.

 

PS HIKE COULD SHRINK

Polystyrene resin producers moved their 5¢/lb price increase from Feb. 15 to March 1. But on March 1, Total cut its hike to 3¢ with a TVA for the rest, so others will probably have to follow suit.

Contributing factors: Benzene feedstock prices are soft. Contract benzene jumped from $1.01/gal in January to $1.35 in February (the ostensible reason for the 5¢ hike in PS), but benzene fell back 6¢ to $1.29 in March. Spot benzene was trading even lower in mid-March at $1.18 to $1.19/gal, adding pressure to shrink the PS increase. Resin demand was steady in the first quarter, with foodservice markets so-so and appliances and electronics very weak. 

 

Market Prices Effective Mid-Mar A
RESIN GRADEb	¢/LB	¢/CU INc

ABS           MED IMPACT    90 - 110      340 - 412       HI IMPACT    95 - 130      359 - 491       X-HI IMPACT    110 - 150      415 - 567       HI HEAT    90 - 125      340 - 472       PIPE    85 - 95      321 - 359       SHEET    90 - 105      340 - 397       TRANSPARENT    134 - 205      506 - 774       FITTINGS    94 - 115      355 - 434       PLATING    165      623       FLAME RET    120 - 140      453 - 529       STRUCT FM    92 - 102      347 - 385       10% GLASS    134 - 145      506 - 548       30% GLASS    129 - 141      487       ABS/PC ALLOY    154 - 185      532 - 699       ABS/PVC ALLOY    139 - 144      525 - 544       ABS/NYLON ALLOY    199 - 355      752 - 1341       ACETAL           HOMOPOL    151 - 172      7.7 - 8.7       20% GLASS    171 - 235      8.7 - 11.9       COPOLYMER    144 - 160      7.3 - 8.1       25% GLASS    171 - 245      8.7 - 12.4       ACRYLIC           G-P    117      5.0       IMPACT    192      8.2       ACRYLONITRILE COPOL           EXTRUSION    101 - 116      4.0 - 4.6       INJECTION    120 - 135      4.8 - 5.4       ALKYD  65 - 74    4.9 - 5.5       CELLULOSICS           ACETATE    187      8.6       CAB    189      8.2       CAP    189      8.2       DAP (G-P)  251 - 497    16.7 - 34.7       EPOXY           G-P RESIN    116 - 126      NAd       COMPOUNDS               C/B/Te    123 - 166      9.4 - 12.9       R/C/Df    208 - 271      15.3 - 20.1       SEMICONDUCTOR               NOVOLAC    193 - 228      13.1 - 15.9       ANHYDRIDE    188 - 268      13.9 - 19.2       EVA           INJECTION    69 - 71      2.3 - 2.4       FILM EXTRU    67 - 69      2.3       EVOH  330    15       FLUORO-POLYMER           CTFE    5000 - 6000      385 - 462       ECTFE    1200 - 1680      90.7 - 120       ETFE    1205 - 1730      80.7 - 115.8       FEP    971 - 1470      74.8 - 113.2       PFA    1550 - 2520      120 - 195       PTFE    500 - 950      33.5 - 63.6       PVDF    750 - 1200      48 - 76.9       IONOMER           PACKAGING    127 - 166      4.3 - 6.0       INDUSTRIAL    150 - 244      5.0 - 8.3       LIQUID-CRYSTAL POLYMERS           INJECTION MIN FILLED    690 - 1035      44.2 - 72.1       GLASS FILLED    695 - 895      40 - 52       CARBON FILLED    1700 - 2000      83.2 - 138.6       UNFILLED    1000 - 1200      58 - 70       EXTRUSION UNFILLED    1200 - 2200      60.5 - 110.9       MELAMINE COMPOUND  90 - 94    5.5 - 5.6       MELAMINE/PHENOLIC COMPOUND  75 - 83    4.5 - 5.0       NYLON           TYPE 6    139 - 159      5.7 - 6.5       MIN FILLED    131 - 144      5.4 - 5.9       30% GLASS    148 - 173      6.0 - 7.0       TYPE 66    153 - 168      6.3 - 6.9       MIN FILLED    151 - 159      6.2 - 6.5       30% GLASS    142 - 192      5.8 - 7.9       TYPE 69    250 - 276      9.7 - 10.7       TYPE 6/10    286 - 313      12.4 - 13.6       TYPE 612    400      15.3       30% GLASS    309 - 311      14.7       40% GLASS    309      14.7       TYPE 46    295      12.6       TYPE 11    650 - 750      24.3 - 28       30% GLASS    NAd - NAd      NAd - NAd       40% GLASS    NAd - NAd      NAd - NAd       TYPE 12    318 - 341      12.1 - 13.0       30% GLASS    327 - 350      14.7 - 15.8       50% GLASS    299 - 340      15.6 - 17.8       TRANSPARENT AMORPHOUS    247 - 360      10.3 - 15.0       PHENOLIC MOLD COMP  75    3.8       REINFORCED GRADES    105 - 268      6.1 - 16       POLYAMIDE-IMIDEg           UNFILLED    2750      148.5       30% GLASS    2500      135       30% CARBON FIB.    3500      185       POLYARYLATE  200 - 280    8.8 - 12.3       POLYARYL SULFONE  440    21.8       POLYBUTYLENE           G-P    94 - 96      3.1       FILM    88 - 91      2.9       PIPE               COLD WATER    116 - 120      3.9 - 4.0       HOT WATER    162 - 166      5.5 - 5.6       POLYCARBONATE           INJECTION    158 - 173     7.9       20% GLASS    164 - 181     8.2       30% GLASS    165 - 207     9.3       EXTRUSION    133 - 171     7.7       BLOW MOLD    138 - 176     7.5       STRUCT FOAM    137 - 172     7.8       20% GLASS    219 - 243     11.0       FR    153 - 188     8.5       CD    124 - 186     8.4       POLYESTER (TP) PBT TYPE           UNFILLED    145 - 150      6.8 - 7.3       HI-IMP    165 - 175      7.8 - 8.3       30% GLASS, FR    195 - 215      9.2 - 10.1       STRUCT FOAM    159 - 165      NAd       PET           BOTTLE (RAILCAR)    71 - 75      3.6 - 3.7       MOD PET               30% GLASS    132 - 143      7.4       55% GLASS    148 - 155      9.8       30% GLASS FLAME RET    147 - 157      9.2       PETG COPOL    114 - 124      5.2 - 5.6       POLYESTER THERMOSET           G-P ORTHO    151 - 162      NAd       ISOPHTHALIC    175 - 196      NAd       BIS-A    210 - 235      NAd       PEEK  4400    231       30% GLASS    3300      173       POLYETHERIMIDE  641 - 646    29.3 - 29.5       30% GLASS    526 - 531      24.0 - 24.2       POLYETHERKETONE (PEK)  2950    130.1       30% GLASS    2600      153       POLYETHERSULFONE  350 - 400    17.2 - 19.7       30% GLASS    425 - 525      21 - 25.9       POLYETHYLENE (RAILCAR) LDPE           G-P MOLDING & EXTRU    50 - 52      1.7       INJECTION    52 - 54      1.7 - 1.8       LID RESIN    55 - 57      1.8 - 1.9       LINER    52 - 54      1.7 - 1.8       CLARITY    48 - 50      1.6 - 1.7       EXTRU COATG    53 - 55      1.8       BLOW MOLD    55 - 57      1.8 - 1.9       LLDPE, BUTENE BASED           G-P MOLDING    55 - 57      1.8 - 1.9       LME 30-DAYj    35      1.3       FILM    52 - 54      1.7 - 1.8       ROTOMOLD    49 - 51      1.6 - 1.7       LLDPE, HAO-BASED           G-P MOLDING    50 - 52      1.7       LID RESIN    60 - 62      1.9       LINER FILM    53 - 55      1.8       HDPE           G-P INJ MOLD    50 - 52      1.7       FILM    57 - 59      1.9       BLOW MOLD    58 - 60      1.9 - 2.0       HMW-HDPE           BLOW MOLDING    54 - 56      1.8       FILM    55 - 57      1.9       PIPE    62 - 64      2.0 - 2.1       UHMW-PE  1.22 - 1.52    4.1 - 5.1       PPE/PPO BASED RESIN           INJECTION    180      6.8       20% GLASSh    283      12.3       30% GLASSh    291      13.3       EXTRUSIONh    242      9.2       STRUCT FM    231      NAd       PPS           40% GLASS    450 - 520      27.0 - 31.2       55% GLASS/MINERAL    345 - 420      22.7 - 27.7       65% GLASS/MINERAL    270 - 315      18.9 - 22.1       POLYPROPYLENE (RAILCAR)           G-P HOMOPOL INJECTION    46 - 48      1.5 - 1.6       LME 30-DAYj    31.0     1.1      EXTRUSION FIBER    44 - 46      1.4 - 1.5       PROFILES    52 - 54      1.7       RANDOM COPOL               BLOW MOLDING    50 - 52      1.6 - 1.7       FILM    50 - 52      1.6 - 1.7       INJECTION    49 - 51      1.6       IMPACT COPOL               MED IMP    60 - 62      1.9 - 2.0       HI IMP    62 - 64      2.0 - 2.1       POLYSTYRENE (RAILCAR)           G-P CRYSTAL    53 - 59      2.0 - 2.2       HI HEAT    56 - 61      2.1 - 2.3       HIPS    62 - 68      2.3 - 2.6       SUPER HI IMP    69 - 79      2.4 - 3.0       FR    75 - 80      2.8 - 3.0       STRUCT FM (FR)    63 - 65      2.4       EPS           UNMODIFIED    85 - 88      NAd       MODIFIED    86 - 90      NAd       POLYSULFONE  650 - 750    29 - 33       10% GLASS 430 20.6    799 - 875      36 - 39       30% GLASS 372 20.01    699 - 775      31 - 35       POLYURETHANE (TP)           ESTER TYPE    185 - 255      8 - 11       ETHER TYPE    245 - 295      10.6 - 13       PU ISOCYANATES           POLYMERIC MDI    125 - 145      NAd       80/20 TDI    135 - 145      NAd       PVC RESIN (RAILCAR)           G-P HOMOPOL    46 - 48      NAd       PIPE    45      NAd       FILM    51      NAd       COPOLYMER FLOORING    71 - 74      NAd       DISPERSION HOMOPOLY    81 - 87      NAd       COPOLYMER    86 - 90      NAd       CPVC PIPE COMPOUND    119      NAd       PVDC           EXTRUDABLE    162      NAd       SILICONES           MOLD. COMP.    581 - 640      38.1 - 39.3       SPECIALTY GR.    891 - 3148      NAd       SILICONE/EPOXY    339 - 343      22.5 - 22.8       STYRENEACRYLIC  108 - 112    3.7 - 4.0       SAN (G-P)  80 - 88    3.0 - 3.3       STYRENE MALEIC ANHYDRIDE           G-P    110 - 115      4.2 - 4.3       HI IMP    130 - 140      4.2 - 4.5       FR    175 - 183      6.7 - 7.0       TP ELASTOMERS           OLEFINIC    70 - 76      2.4       POLYAMIDE    300 - 350      10.9 - 12.7       POLYESTER    200 - 310      8.8 - 13.6       STYRENIC    82 - 237      2.9 - 8.3       UREA MOLDING COMPOUND           BLACK & BROWN               WHITE & IVORY               VINYL ESTER           COR RES    221 - 245      NAd       HEAT & COR RES    246 - 258      NAd

KEY: Colored areas indicate pricing activity. An arrow () indicates direction of price change. aTruckload, unless otherwise specified. bUnfilled, natural color, unless otherwise specified. cBased on typical or average density. dNot applicable. eNovolac and anhydride grades for coils, bushings, transformers. fNovolac and anhydride grades for resisitors, capacitors, diodes. gIn quantities of 20,000 lb. h19,800-lb load. jLME 30-day futures contract for lots of 54,564 lb..