Pricing Update - December 2006

Prices of commodity resins were falling in October and November. Despite a try for a December PE hike, industry observers expect another month or two of weak prices.

 

PE hike announced

Polyethylene prices dropped another 6¢/lb by early November. The decline in prices erased 11¢ worth of increases implemented earlier this year and possibly a couple of cents more. The London Metal Exchange (LME) December short-term futures contract for butene LLDPE for blown film dropped to 50.1¢ from November’s 52.8¢/lb. Nonetheless, at press time at least three suppliers–Dow, Nova, and CP Chem–issued price hikes of 6¢/lb for Dec. 1.

Contributing factors: Suppliers say orders for PE resins came to a stop in the second half of September, as a result of year-end inventory destocking throughout the supply chain–which occurred nearly two months earlier than usual. Some suppliers attribute this to inventory build-up in the second and third quarters. Explains one resin maker, “Several converters and resin distributors purchased at least a month’s inventory to secure against another major hit from hurricanes. As the hurricane season came to a quiet end, there was plenty of resin in the secondary markets and at converters.”

Meanwhile, October ethylene monomer contract prices settled at 48.5¢/lb, down 3¢ from September, and November contract bids were coming in 3¢ to 4¢ lower than that. Sources at purchasing consultant Resin Technology Inc. (RTI), Fort Worth, Texas, say lower monomer prices could drag PE prices lower too.

Suppliers maintain that market fundamentals will support firmer prices in the new year–hence the December price increase. “We see lower inventories across the chain globally,” says one resin producer. Domestic suppliers’ inventory levels, typically 45 to 60 days, are currently 35 to 40 days. RTI sources don’t see PE prices moving upwards until February at the earliest.

 

PP prices down

Polypropylene prices dropped an average of 3.5¢/lb by early November. LME’s December short-term futures contract for g-p injection-grade homopolymer also dropped to 50.4¢ from November’s 50.1¢/lb.

Contributing factors: Suppliers attribute the drop in PP prices primarily to the sharp decline in propylene monomer tabs, as well as resin inventory destocking in anticipation that PP prices will fall in parallel with monomer. Propylene contract prices for November dropped 9¢ to 40.5¢/lb.

At press time, some industry sources expected PP prices to drop even more before the year’s end. Sources at RTI saw the possibility of trimming another 5¢ to 6¢/lb off contract prices.

 

PVC prices sag

PVC resin prices fell 2¢/lb for most buyers in October, though some got an extra penny off. In mid-November, both processors and suppliers expect prices to drop another 2¢ or 3¢, depending on how much a buyer paid in October.

Contributing factors: With chemical feedstock prices dropping, PVC buyers stopped ordering and ran down inventories while waiting for resin prices to slip.

 

Up-again, down-again PS

PS producers bucked the general downtrend in resin and feedstock prices and raised prices 3¢/lb in October, only to drop them again by 3¢ in November. Huntsman and Nova tried for a 4¢ hike on EPS in November, but when BASF didn’t follow, the attempt flopped. EPS prices are expected to stay flat.

Contributing factors: PS demand is weak, especially in food service, which has lost some market share to competitive materials. Only durables like refrigerators, printers, and office equipment are holding up. EPS demand isn’t down as much as other construction materials.

 

Other hikes

Arkema lifted tabs on its Rilsan specialty nylons and Orgalloy nylon alloys by 4% last month. And CYRO hiked acrylic molding compounds by 10¢/lb on Dec. 1.

 

Thermosets up

AOC, Interplastic, and Hexion followed Reichhold’s lead in raising vinyl ester products by 5¢/lb last month. Hexion also followed Dow in hiking epoxy resins 7¢/lb in October. 

 

Market Prices Effective Mid-Nov A

RESIN GRADEb ¢/LB ¢/CU INc    ABS           MED IMPACT    84 - 90      3.1 - 3.4       HI IMPACT    89 - 125      3.3 - 4.7       X-HI IMPACT    99 - 140      3.7 - 5.3       HI HEAT    89 - 110      3.3 - 3.8       PIPE    89 - 110      3.3 - 4.1       SHEET    94 - 110      3.5 - 4.2       TRANSPARENT    129 - 165      5.1 - 6.4       FITTINGS    89 - 115      3.3 - 4.3       PLATING    99 - 105      3.7 - 3.9       FLAME RET    124 - 140      4.6 - 5.9       STRUCT FM    87 - 97      3.2 - 4.3       10% GLASS    129 - 140      4.8 - 5.6       30% GLASS    124 - 136      4.6 - 6.3       ABS/PC ALLOY    149 - 180      5.5 - 6.8       ABS/PVC ALLOY    134 - 139      5.0 - 5.2       ABS/NYLON ALLOY    194      7.3       ACETAL           HOMOPOL    148 - 165      7.5 - 8.4       20% GLASS    168 - 228      8.5 - 11.5       COPOLYMER    141 - 153      7.1 - 7.7       25% GLASS    168 - 240      8.5 - 12       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    46 - 52      1.5 - 1.7       FILM EXTRU    42 - 49      1.4 - 1.6       EVOH  265    11.3       FLUORO-POLYMER           CTFE    5000 - 6000     385 - 462       ECTFE    1470 - 1680     93.1 - 107.7      ETFE    1155 - 1680     70.7 - 102.8      FEP    971 - 1470      74.8 - 113.2      PFA    1785 - 2520     134.9 - 190.5       PTFE    450 - 900      34.8 - 69.7       PVDF    680 - 900      43.3 - 57.3       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    329 - 341      13.6 - 14.1       30% GLASS    331 - 350      15.0 - 15.8       40% GLASS    347 - 360      17.7 - 18.5       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    138 - 165      5.9 - 7.0       20% GLASS    177 - 190      7.6 - 8.2       30% GLASS    178 - 217      7.6 - 9.3       EXTRUSION    145 - 180      6.3 - 7.8       BLOW MOLD    155 - 190      6.7 - 8.2       STRUCT FOAM    149 - 181      6.4 - 7.8       20% GLASS    235 - 255      10.1 - 11.0       FR    166 - 197      7.1 - 8.5       CD    140 - 200      6.0 - 8.6       POLYESTER (TP) PBT TYPE           UNFILLED    143 - 150      6.9       HI-IMP    154 - 165      7.6       30% GLASS, FR    185 - 207      11.9       STRUCT FOAM    159 - 165      NAd       PET           BOTTLE (RAILCAR)    88 - 89      4.4 - 4.5       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

RESIN GRADEb ¢/LB ¢/CU INc    POLYESTER THERMOSET           G-P ORTHO    140 - 145      NAd       ISOPHTHALIC    165 - 175      NAd       BIS-A    210 - 215      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    81 - 83     2.6 - 2.7      INJECTION    83 - 85     2.7      LID RESIN    85 - 87     2.7 - 2.8      LINER    79 - 81     2.6      CLARITY    78 - 80     2.6      EXTRU COATG    82 - 84     2.7      BLOW MOLD    85 - 87     2.7 - 2.8      LLDPE, BUTENE BASED           G-P MOLDING    68 - 70     2.3 - 2.4      LME 30-DAYj    50.1     1.7      FILM    70 - 72     2.4      ROTOMOLD    72 - 74     2.4 - 2.5      LLDPE, HAO-BASED           G-P MOLDING    79 - 81     2.6 - 2.7       LID RESIN    89 - 91     2.9 - 3.0       LINER FILM    83 - 85     2.7 - 2.8       HDPE           G-P INJ MOLD    73 - 75     2.5      FILM    77 - 79     2.7      BLOW MOLD    73 - 75     2.5 - 2.6      HMW-HDPE           BLOW MOLDING    77 - 79     2.7      FILM    79 - 81     2.7      PIPE    84 - 86     2.8 - 2.9      UHMW-PE  100 - 125    3.6 - 3.7       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    357 - 404      21.2 - 24.0       55% GLASS/MINERAL    289 - 310      20.8 - 22.3       65% GLASS/MINERAL    226 - 273      15.5 - 18.7       POLYPROPYLENE (RAILCAR)           G-P HOMOPOL INJECTION    78 - 80     2.6      LME 30-DAYj    50.4     1.6      EXTRUSION FIBER    76 - 78     2.5 - 2.6      PROFILES    82 - 84     2.6 - 2.7      RANDOM COPOL    83 - 85     2.7      BLOW MOLDING    83 - 85     2.7      FILM    80 - 82     2.6      INJECTION    90 - 92     2.9 - 3.0      IMPACT COPOL               MED IMP    90 - 92     2.9 - 3.0      HI IMP    93 - 95     3.0 - 3.1      POLYSTYRENE (RAILCAR)           G-P CRYSTAL    79 - 85      3.0 - 3.3       HI HEAT    82 - 88      3.1 - 3.3       HIPS    80 - 85      3.0 - 3.3       SUPER HI IMP    90 - 94      3.2 - 3.5       FR    98 - 106      3.7 - 4.0       STRUCT FM (FR)    105 - 108      NA       EPS           UNMODIFIED    85 - 88      NAd       MODIFIED    86 - 90      NAd       POLYSULFONE  569    25       10% GLASS 430 20.6    669      32       30% GLASS 372 20.01    609      20       POLYURETHANE (TP)           ESTER TYPE    185 - 255      8 - 11       ETHER TYPE    245 - 295      10.6 - 13       PU ISOCYANATES           POLYMERIC MDI    118 - 135      NAd       80/20 TDI    145 - 155      NAd       PVC RESIN (RAILCAR)           G-P HOMOPOL    52 - 54     NAd       PIPE    49 - 51     NAd       FILM    60 - 63     NAd       COPOLYMER FLOORING    68 - 70     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)  66 - 74    2.5 - 2.8       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    76      3.8       WHITE & IVORY    81      4.0       VINYL ESTER           COR RES    218 - 230     NAd       HEAT & COR RES    243      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..