Polyolefin Prices Flare Up Again

 In the first four months of the year, commodity resin prices took a breather from their relentless uphill march. Then, last month, polyolefin prices caught a sudden updraft. Resin demand and monomer prices, both of which had been slumping for months, made a quick turnaround.

 

PE is high and tight

Polyethylene prices were on the way up last month as suppliers aimed to implement their May 1 increases, generally 6¢/lb for LL/LDPE and 3¢ for HDPE. A new price increase of 7¢/lb was issued by several major suppliers for June 1. This initiative follows a cumulative drop of 20¢/lb in PE resin prices since December.

The London Metal Exchange (LME) short-term futures contract for June in butene LLDPE for g-p blown film is 56.5¢/lb, up from May’s 53.8¢ and April’s 51¢/lb.

Contributing factors: Suppliers’ efforts to raise prices are encouraged by an uptick in demand resulting from a combination of a seasonal factors and inventory restocking by processors. “Demand was flat in the first quarter, but we expect demand in the second quarter to be up 2% to 3%,” said one major resin maker. “We anticipate overall demand in 2006 to show growth of 6% to 8%, with about half of that the result of downstream inventory replenishment, and the rest a solid increase,” says a major supplier.

Ethylene monomer contract prices, which had dropped 2¢/lb to 45.5¢/lb for April, were generally expected to move up 4¢ to 6¢ in May, following a rise in spot prices to 50¢/lb. “There is no major new capacity scheduled for either ethylene or polyethylene, so supply will only get tighter,” says one industry source. Moreover, Huntsman’s ethylene cracker in Port Arthur, Texas, which accounts for 2% of domestic ethylene supply, may not be back in operation for at least six months after a major fire there last month.

 

PP prices rising, too

Polypropylene prices were also on the way up last month, generally by 4¢/lb, as suppliers aimed to fully implement their May increases. A new 6¢ increase, effective June 1, appeared to have been led by Basell Polyolefins.

LME’s June short-term futures contract for g-p injection-grade homopolymer is 53.2¢/lb, up from May’s 50.1¢ and April’s 51¢/lb.

Contributing factors: In defense of its price hike, Basell cited continued escalation of energy, transportation, and feedstock costs, along with improved demand—factors that are confirmed by other suppliers and industry analysts. Says one supplier, “Demand was up about 2% in the first quarter over 2005, but we anticipate a 3% to 4% increase for the second quarter. We are also seeing more customers looking to stock up, generally with a month’s supply, in anticipation of this year’s hurricane season.”

Meanwhile, polymer-grade propylene monomer stood at 47¢/lb in April, with May contracts expected to settle at about 49¢. At press time last month, June monomer prices appeared to be headed upward by another 1¢ to 2¢/lb.

 

Nylon hike

Solutia announced a price increase of 7¢/lb on all its Ascend and Vydyne nylon 66 resins.

 

PUR prices & surcharges rise

Dow Polyurethanes issued a 5¢/lb increase for June 1 on TDI, MDI, and polyether and copolymer polyols. Meanwhile, BASF implemented a 2¢/lb fuel surcharge on all tank truck, tote, and drum shipments of its PUR systems for rigid and flexible foams and solid urethane applications as of May 15. BASF attributes its move to the need to offset the “severe impact” on both its inbound and outbound freight costs due to high diesel and gasoline prices.

On a positive note, Bayer MaterialScience claims to have developed new technology for making TDI that reduces the plant capital cost by 10% to 20% and cuts energy consumption by one-third. A 60-million-lb/yr pilot plant using the new technology has been running in Germany for over a year. Bayer plans to use the technology commercially for the first time at a 320-million-lb plant planned to be built in China by the end of 2009.

 

Styrene plant idled for lack of ethylene

Nova Chemicals decided last month to “temporarily idle” its Bayport, Texas, styrene monomer plant because of limited ethylene feedstock availability on the Gulf Coast. In particular, Huntsman Corp. declared force majeure on ethylene after an explosion at its olefins plant in Port Arthur, Texas, at the end of April.

 

Market Prices Effective Mid-May A

RESIN GRADEb ¢/LB ¢/CU INc    ABS           MED IMPACT    80 - 90      3.0 - 3.4       HI IMPACT    85 - 125      3.2 - 4.7       X-HI IMPACT    95 - 140      3.6 - 5.3       HI HEAT    85 - 110      3.8       PIPE    85 - 110      3.2 - 4.1       SHEET    90 - 110      3.4 - 4.2       TRANSPARENT    125 - 165      4.9 - 6.4       FITTINGS    85 - 115      3.2 - 4.3       PLATING    95 - 105      3.5 - 3.9       FLAME RET    120 - 140      4.6 - 5.9       STRUCT FM    83 - 97      3.6 - 4.3       10% GLASS    125 - 140      5.0 - 5.6       30% GLASS    116 - 136      5.3 - 6.3       ABS/PC ALLOY    145 - 180      5.5 - 6.8       ABS/PVC ALLOY    130 - 135      5.8 - 6.1       ABS/NYLON ALLOY    190      7.3       ACETAL           HOMOPOL    130 - 147      6.7 - 7.3       20% GLASS    160 - 220      9.0 - 12.4       COPOLYMER    133 - 145      6.8 - 7.4       25% GLASS    160 - 230      8.1 - 11.7       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    2500 - 5500     193 - 424       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)    82 - 87      4.1 - 4.4       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    135 - 140      NAd       ISOPHTHALIC    160 - 170      NAd       BIS-A    205 - 210      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    82 - 84      2.6 - 2.7       INJECTION    85 - 87      2.7 - 2.8       LID RESIN    87 - 89      2.8       LINER    83 - 85      2.6 - 2.7       CLARITY    81 - 83      2.6       EXTRU COATG    85 - 87      2.7 - 2.8       BLOW MOLD    87 - 89      2.8       LLDPE, BUTENE BASED           G-P MOLDING    71 - 73      2.4       LME 30-DAYj    56.5      1.9       FILM    73 - 75      2.4 - 2.5       ROTOMOLD    75 - 77      2.4 - 2.5       LLDPE, HAO-BASED           G-P MOLDING    74 - 76      2.4 - 2.5       LID RESIN    83 - 85      2.7 - 2.8       LINER FILM    78 - 80      2.6 - 2.7       HDPE           G-P INJ MOLD    72 - 74      2.5       FILM    82 - 84      2.7 - 2.8       BLOW MOLD    76 - 78      2.6 - 2.7       HMW-HDPE           BLOW MOLDING    81 - 83      2.7 - 2.8       FILM    83 - 85      2.8       PIPE    88 - 90      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    76 - 78      2.5 - 2.6       LME 30-DAYj    53.2      1.7       EXTRUSION FIBER    75 - 77      2.5 - 2.6       PROFILES    80 - 82      2.6 - 2.7       RANDOM COPOL               BLOW MOLDING    81 - 83      2.6 - 2.7       FILM    80 - 82      2.6 - 2.7       INJECTION    78 - 80      2.6       IMPACT COPOL               MED IMP    89 - 91      2.9       HI IMP    92 - 94      2.9 - 3.0       POLYSTYRENE (RAILCAR)           G-P CRYSTAL    64 - 72      2.4 - 2.7       HI HEAT    67 - 75      2.5 - 2.8       HIPS    65 - 72      2.4 - 2.7       SUPER HI IMP    75 - 81      2.8 - 3.0       FR    83 - 91      3.1 - 3.4       STRUCT FM (FR)    105 - 108            EPS           UNMODIFIED    85 - 88      NAd       MODIFIED    86 - 90      NAd       POLYSULFONE  605    27 - 27.3       10% GLASS 430 20.6    557 - 612      24.9 - 25       30% GLASS 372 20.01    557 - 562      24.9 - 25       POLYURETHANE (TP)           ESTER TYPE    185 - 255      8 - 11       ETHER TYPE    245 - 295      10.6 - 13       PU ISOCYANATES           POLYMERIC MDI    120 - 135      NAd       80/20 TDI    90 - 98      NAd       PVC RESIN (RAILCAR)           G-P HOMOPOL    53 - 55      NAd       PIPE    50 - 52      NAd       FILM    61 - 64      NAd       COPOLYMER FLOORING    71 - 73      NAd       DISPERSION HOMOPOLY    84 - 90      NAd       COPOLYMER    89 - 93      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    287 - 337      10.4 - 12.3       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    205 - 217      NAd       HEAT & COR RES    230      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..