Plastics Technology

MAY 2012

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follow the monomer's trend, but PP spot prices will be "much more indicative of real supply/demand." He noted that spot propyl- ene and PP prices were trading at discounts of 3-4¢/lb to estimated contract prices in the first two weeks of April. PP demand was largely flat in the first quarter, with at most an increase of about 1%, owing to pre-buying in January before the whopping increase. PP suppli- ers have not throttled back production, and inventories have been building. POLYPROPYLENE PRICE TRENDS Homopolymer MAR Copolymer APR 5¢/lb MAR © 5¢/lb APR ©§¨ §¨ PS PRICES FLAT OR DOWN Polystyrene prices appeared to have reached their peak by early April, and there were no new price hikes under way. Some previously delayed EPS price hikes were being implemented. Although the second quarter has his- torically seen the highest demand for styrenic resins, real demand is not pro- jected to be strong, according to Stacy Shelly, RTi's director of business develop- ment for engineering resins, PS, and PVC. In fact, he anticipates falling PS prices by the end of this quarter. By mid-April, feedstock costs for GPPS and EPS were down about 1.5¢/lb after rising 13.5¢/lb since Jan. 1. In contrast, costs to produce HIPS remained flat last month, after increasing 17¢ since December, due to higher butadiene prices. According to Shelly, the HIPS premium over GPPS for export shipments is as low as 9¢/lb, while the domestic spread is now closer to 13¢. (The historical delta of 4-5¢/lb was last seen in 2010.) April butadiene contract prices are up 57¢/lb—close to 60%—for the year to date. Starting this month, BD supply is expected to increase and prices ought to start coming down. Styrene monomer spot prices were declining last month. "While ABS de- mand is strong, downstream demand for PS is weak. After the upcoming cracker 66 MAY 2012 PLASTICS TECHNOLOGY restarts, ethylene prices should drop, easing some of the upward pressure on styrene prices," says Shelly. POLYSTYRENE PRICE TRENDS GPPS HIPS MAR Molding 2¢/lb APR MAR 4¢/lb APR © ©§¨ §¨ PVC PRICES RISE, BUT COULD FALL PVC prices moved up 2¢ in March, driven by higher ethylene prices and a tighter supply/demand situation. New PVC hikes of 2¢ and 3¢/lb have been issued for Apr. 1 and May 1 respectively. Ethylene contract prices, to which PVC resin suppliers are tied, dropped 1.75¢/lb in February and rose by the same amount in March. Domestic PVC demand was up 9% in first quarter, while plant operating rates were throttled back by suppliers to the low-to-mid 70s. PVC suppliers might be able to imple- ment their 2¢ April hike, after the tempo- rary unplanned supply outage at the Williams ethylene cracker—representing 3-4% of domestic ethylene production— unsettled an already tightly balanced market, according to Mark Kallman, RTi's director of client services for engi- neering resins and PVC. PVC PRICE TRENDS Pipe MAR 2¢/lb APR ? 2¢/lb 2¢/lb General Purpose MAR APR ©©©© However, most of the planned ethylene ? 2¢/lb cracker outages were ending last month, and ethylene contract prices are very likely to move downwards. So the May 3¢ PVC hike does not appear to have much chance of implementation. On the contrary, lower prices for PVC are supported by significant pre-buying in the first quarter. By Lilli Manolis Sherman, Contributing Editor

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