Pricing Update - October 2006

Polyolefin prices rose a bit last month as suppliers implemented summer price increases to make up for higher energy and feedstock prices. Resin capacity utilization remained high (over 90%) and suppliers expected a seasonal uptick in demand in the fourth quarter. They also said polyolefin exports to Europe, Asia, and the Middle East have revived after a pause of three to four years, thanks to a doubling of the price advantage of natural gas—the main feedstock of the U.S. industry—over oil, which feeds overseas production.

After oil prices dropped as much as $11/barrel by the second week of September, that scenario may be changing. Says Lowell Huovinen, managing partner at resin purchasing consultant Resin Technology Inc. (RTI), Fort Worth, Texas, “North American exports are slowing as oil prices have gone down. We don’t think domestic demand is as good as usual for this time of year, and producers’ inventories are increasing, as are those of processors. We expect to see downward pressure on resin prices for the rest of the year.”

A similarly mixed picture was evident for PS and PVC. Prices were up slightly last month, but prospects for further increases were in doubt.

 

PE prices up

Polyethylene prices rose about 5¢/lb in August as a result of partial implementation of the 7¢ increase announced for July. Suppliers moved to lift the remaining 2¢ TVA as of Sept. 15 or Oct. 1. A 5¢/lb increase for Aug. 1 was still pending. But the London Metal Exchange (LME) October short-term futures contract for butene LLDPE for blown film was down slightly to 59.9¢/lb from September’s 60.3¢/lb.

Contributing factors: Ethylene monomer contracts for August rose 2¢/lb, much less than the 7¢ to 8¢/lb originally sought. Suppliers say resin inventory levels are balanced to a bit tight. They say markets for PE exports are better than they have been in years. “We see strong demand for PE globally,” says one major supplier. Demand is weaker in some areas like stretch film and industrial liners but is strong in consumer packaging and pipe.

 

Polypropylene goes up, too

PP resin tabs moved up as suppliers got part of their August 4¢ increase. Average prices moved up 3¢/lb, letting suppliers recoup more than the 1.5¢ to 2¢/lb lost in July. A 4¢/lb hike was pending for Sept. 1. Still, LME’s October short-term futures contract for g-p injection homopolymer slid to 57.8¢/lb from September’s 60.5¢.

Contributing factors: Resin prices appear to be driven by escalating monomer prices. Rising August monomer contracts erased the 4¢ drop in July, and September contracts looked likely to go 2¢ higher. Nonetheless, RTI’s Huovinen expects PP suppliers to have a hard time implementing even part of the September hike.

 

PET prices still high

PET prices are 10¢/lb higher than in June. Suppliers implemented a 4¢ increase in May and got about 6¢ of their 8¢ July increase by the end of August.

Contributing factors: PET suppliers complain of poor profit margins and have yet to feel the impact of 1.1 billion lb of new capacity coming on by early 2007. Still-rising feedstock prices have pushed up resin tabs despite that looming oversupply.

 

PVC up 2¢ in August

PVC resin prices rose 2¢/lb in August, implementing a hike that had been pending since May. Another 2¢ increase announced for Sept. 1 isn’t expected to stick. PVC compounders announced increases of 3¢ to 4¢ for September and October.

Contributing factors: Pipe and compound demand softened in September. Housing starts dropped from 2.1 million units/yr to 1.8 million between the first and third quarters, but that’s still a strong market.

 

Polystyrene hike delayed

PS producers pushed through the 4¢ July increase last month. But they put a 5¢ hike for Sept. 1 on hold.

Contributing factors: Resin demand picked up in August on the threat of a possible hurricane. Despite record PS prices, producers have lost money this year because of soaring benzene prices. But benzene contract prices dropped in September to $3.55/gal from $3.72 in August.

 

More hikes for MDI, TDI

Dow and Huntsman increased MDI prices on Sept. 1—Dow by 10¢/lb and Huntsman by 5¢. (BASF hiked MDI 10¢ on Aug. 1.) Dow also said it would raise TDI tabs 15¢/lb on Oct. 1. 

 

 

Market Prices Effective Mid-Sept 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    92 - 94      3.0 - 3.1       INJECTION    94 - 96      3.1 - 3.2       LID RESIN    96 - 98      3.2       LINER    90 - 92      3.0       CLARITY    88 - 90      2.9 - 3.0       EXTRU COATG    93 - 95      3.1 - 3.2       BLOW MOLD    96 - 98      3.2       LLDPE, BUTENE BASED           G-P MOLDING    79 - 81      2.6 - 2.7       LME 30-DAYj    81 - 83     2.7      FILM    59.9      2.0       ROTOMOLD    83 - 85      2.7 - 2.8       LLDPE, HAO-BASED           G-P MOLDING    84 - 86      2.8       LID RESIN    94 - 96      3.1 - 3.2       LINER FILM    87 - 89      2.9       HDPE           G-P INJ MOLD    81 - 83      2.8       FILM    88 - 90      3.0       BLOW MOLD    84 - 86      2.8       HMW-HDPE           BLOW MOLDING    88 - 90      3.0 - 3.1       FILM    90 - 92      3.1       PIPE    95 - 97      3.2 - 3.3       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    80 - 82      2.6 - 2.7       LME 30-DAYj    57.8     1.9      EXTRUSION FIBER    78 - 80      2.6       PROFILES    84 - 86      2.7 - 2.8       RANDOM COPOL               BLOW MOLDING    86 - 88      2.8       FILM    85 - 87      2.7 - 2.8       INJECTION    82 - 84      2.7       IMPACT COPOL               MED IMP    93 - 95      3.0 - 3.1       HI IMP    96 - 98      3.1 - 3.2       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    55 - 57      NAd       PIPE    52 - 54      NAd       FILM    63 - 66      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    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    206 - 220      NAd       HEAT & COR RES    233      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..