Your Business Pricing Update - May 2008

Commodity resin producers keep pushing for price increases, but their success is limited by weak market demand and soft prices of many monomers. PET prices may rise, however, along with those of engineering resins and thermosets.

 

PE PRICES STABLE

Polyethylene prices were largely flat in March, after a drop in February that shaved off 3¢ of the 9¢/lb increases suppliers have implemented since last October. Also, a 6¢/lb hike was delayed from March to April 1. Meanwhile, the London Metal Exchange (LME) North American futures contract for May in blown film butene LLDPE rose to 67.6¢/lb from April’s 65.7¢.

Contributing factors: Softening monomer prices will make it difficult for resin suppliers to implement price hikes, predicts Mike Burns, global business director for PE at resin purchasing consultant Resin Technology, Inc. (RTI) in Fort Worth, Texas. He says March ethylene monomer contract prices moved up from 58.5¢ to 61.5¢/lb, a result of planned and unplanned plant outages that drove up spot ethylene prices. By mid-April, however, ethylene spot prices had dropped below 55¢/lb, according to Burns. At that point, unsettled April ethylene contract price bids ranged from 52¢ to 58.5¢/lb. “May contract prices could move even lower, possibly to under 50¢/lb,” he said. Ethylene comes from ethane, which had been tracking crude oil prices to a high of $1.17/lb in January. Now ethane appears to have stopped following oil prices and has leveled off at 94¢ to 97¢/lb.

Demand for PE is flat overall, except for food packaging and agricultural films. PE exports are also down, primarily due to container shipping congestion at eastern U.S. seaports.

 

PP PRICES UP

Polypropylene prices moved up in March by 1 to 2¢/lb, as a result of 2¢ increases that were slated for February. A new 5¢ increase emerged for April 1. The May LME North American short-term futures contract for g-p injection-grade homopolymer sold for 68.9¢/lb, a half-cent uptick from April.

Contributing factors: Since January, suppliers have raised prices by 2¢ to 4¢/lb, although they had aimed for increases totaling 9¢/lb. The latest hike is tied directly to feedstock prices. March propylene contracts moved up 2¢/lb and April contracts settled early on an increase of 3.5¢/lb.

Driving monomer prices, which hit a new record of 65¢/lb with the April increase, is a significant drawdown of propylene supplies as a result of planned and unplanned refinery shutdowns. Says Scott Newell, RTI’s director of client services for PP, “We think the monomer supply will improve over the next two months.” Newell also notes that rising monomer prices and port congestion have slowed resin exports.

Export and domestic demand was down by 3% overall in the first quarter. “Except for a couple of markets like food and consumer packaging, everything is slow,” says Newell. PP suppliers curtailed plant operating rates, now estimated to be in the 80-85% range vs. around 95% for much of last year. Some industry sources do not believe suppliers will be able to get the full 5¢ increase, noting that even the 2¢/lb March hike was trimmed back.

 

PET PRICES RISING?

PET prices are expected to move up in the second quarter. In mid-April, suppliers were aiming to implement 5¢/lb price hikes, but any movement was more likely to show up in May.

Contributing factors: The new resin increases are driven by increased costs of paraxylene and ethylene glycol. “Processors can expect to see higher prices in the second quarter,” stated RTI’s PET global business director Mike Dewsbury. “I don’t believe resin producers will add anything to their profit margins, though I’m sure they’ll try. They must pass through any increases in feedstock costs to stay afloat.”

Although PET dropped 2.5 to 3¢/lb by the end of February, it was largely due to the 6¢ decline in ethylene glycol prices. Contract prices for feedstocks were unsettled in mid-April, but increases of 4¢ to 4.5¢/lb were being sought for paraxylene and 1¢ to 2¢/lb for ethylene glycol. Together they would translate into increases of at least 2-3¢ for PET.
Demand for PET in the first quarter was estimated to be flat, though some seasonal uptick appeared at the start of the second quarter.

 

PVC DEMAND WEAKER

A pair of 2¢ hikes was announced for January and February, but the second hike was delayed to March by Formosa and OxyChem, where it hangs in limbo. March PVC prices were expected to be flat.

Contributing factors: Ethylene monomer price dipped 3¢ in February, rose 3¢ in March, and was expected to be flat or off 2¢ again in April, which explains why PVC prices aren’t moving. Resin demand remains very weak in home construction and renovation. Commercial construction is reportedly flat. Georgia Gulf idled its Oklahoma City plant along with one idled earlier in Sarnia, Ont., taking a total of 1 billion lb temporarily out of the market. Shintech’s new 300-million-lb plant is expected to start up in June.

 

PS PAUSES AFTER 7¢ CLIMB

PS resin producers put together a combined 7¢/lb in increases from February through April. Most got 2¢ in February and 3¢ or 5¢ in March. Activity in April is expected to be flat.

Contributing factors: PS demand was way down in March and preliminary figures for the first quarter were down 5.3% from the same period last year. But seasonal demand appeared to be coming back in April. Benzene prices softened in April, when contracts settled at $3.75/gal.

 

NYLON, PBT & THERMOSETS

More price increases for nylon and PBT followed BASF’s lead in March. DSM hiked nylon 6 and 66 by 15¢/lb on March 31. Solutia raised tabs on nylon 66 by 10¢/lb on April 15. Du Pont’s increase was 12¢/lb, effective May 1.

DSM also raised PBT prices 15¢/lb on March 31. Du Pont increased PBT, PET, Thermx high-performance polyesters, and Hytrel copolyester TPEs by 10¢ on May 1.

Following AOC and Reichhold’s unsaturated polyester/vinyl ester increases of 7¢/lb last month, CCP and Interplastic announced similar hikes for April 28 and May 1, respectively. 

 

Market Prices Effective Mid-Apr A

RESIN GRADEb ¢/LB ¢/CU INc    ABS           MED IMPACT    90 - 110      3.4 - 4.2       HI IMPACT    95 - 131      3.6 - 5.0       X-HI IMPACT    105 - 145      4.0 - 5.5       HI HEAT    90 - 125      3.4 - 4.7       PIPE    89 - 100      3.7 - 3.8       SHEET    94 - 110      3.5 - 4.2       TRANSPARENT    129 - 200      5.6 - 8.8       FITTINGS    89 - 110      3.5 - 4.3       PLATING    160      6.0       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 - 350      9.0 - 16       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    693 - 1050      44.4 - 67.2       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    171 - 182      7.4 - 7.9       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    150 - 185      7.0 - 7.5       STRUCT FOAM    149 - 181      6.4 - 7.8       20% GLASS    235 - 255      10.1 - 11.0       FR    166 - 197      7.1 - 8.5       CD    135 - 195      5.8 - 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)    75 - 77    3.9     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    147 - 157      NAd       ISOPHTHALIC    175 - 190      NAd       BIS-A    210 - 230      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    75 - 78      2.5 - 2.6       INJECTION    77 - 79      2.6       LID RESIN    79 - 81      2.6       LINER    74 - 76      2.5       CLARITY    73 - 75      2.4 - 2.5       EXTRU COATG    78 - 80      2.6       BLOW MOLD    80 - 81      2.6       LLDPE, BUTENE BASED           G-P MOLDING    72 - 74      2.4       LME 30-DAYj    67.6      2.3       FILM    77 - 79      2.6       ROTOMOLD    74 - 76      2.4 - 2.5       LLDPE, HAO-BASED           G-P MOLDING    75 - 77      2.5 - 2.6       LID RESIN    85 - 87      2.7 - 2.8       LINER FILM    78 - 80      2.6       HDPE           G-P INJ MOLD    72 - 74      2.4       FILM    81 - 83      2.6       BLOW MOLD    82 - 84      2.6 - 2.7       HMW-HDPE           BLOW MOLDING    79 - 81      2.6       FILM    80 - 82      2.6       PIPE    87 - 89      2.9       UHMW-PE  1.00 - 1.25    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    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    79 - 81      2.5 - 2.6       LME 30-DAYj    68.9      2.3       EXTRUSION FIBER    77 - 79      2.5       PROFILES    82 - 84      2.6 - 2.7       RANDOM COPOL               BLOW MOLDING    83 - 85      2.6 - 2.7       FILM    83 - 85      2.6 - 2.7       INJECTION    82 - 84      2.6       IMPACT COPOL               MED IMP    93 - 95      3.0       HI IMP    95 - 97      3.0 - 3.1       POLYSTYRENE (RAILCAR)           G-P CRYSTAL    91 - 97      3.4 - 3.6       HI HEAT    94 - 100      3.7 - 3.6       HIPS    92 - 97      3.4 - 3.6       SUPER HI IMP    101 - 106     3.8 - 4.0       FR    107 - 113     4.0 - 4.2       STRUCT FM (FR)    105 - 108      NA       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    58 - 60      NAd       PIPE    57      NAd       FILM    63 - 65      NAd       COPOLYMER FLOORING    69 - 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    223 - 240      NAd       HEAT & COR RES    248 - 253      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..