The trend for commodity and engineering resins for the first quarter of 2013 appear to be trending flat-to-down according to an article in Plastics Technology April 2013. The following pricing information was printed in Plastics Technology April 2013 article “Most Resin Prices Flat or Lower written by Lilli Manolis Sherman, Senior Editor. ABS is the exception due to good domestic demand and other global factors. Both PE and PP jumped up in the first quarter but a reverse in feedstock prices, lackluster demand and some improvements in supplier inventories now are pushing prices in the other direction. The same goes for Polystyrene pricing, PC and Nylons 6 and 66. This is the overall outlook according to Resin Technology Inc and CEO Michael Greenberg of the Plastics Exchange in Chicago.
HDPE, LL/LDPE Flat
Polyethylene price moves in February were split with HDPE injection molding grades up while LDPE and LLDPE saw no change after the January price increase. Suppliers were seeking new increases for HDPE and LL/LDPE but implementation is doubtful because the lack of demand and declining monomer prices according to Mike Burns , VP of PE at RTI. The move to hike HDPE prices was attributed by suppliers to increased demand and low inventories. The tightness in PE supply appears to be more directly linked to pre-buying late last year in anticipation of price hikes and export demand. Both Greenberg and Burns agree that, ethylene supply/demand should be quite well balanced.
PP Prices Up but Not for Long
Polypropylene contract prices moved up in February following propylene monomer contract prices penny for penny. This came after PP prices surge by in January, following the monomer’s increase plus a surcharge. But a downward trend appeared imminent as at least one propylene contract price nomination in early March posted a reduction.
Scott Newell, RTI’s director of client services for PP, foresaw a drop in monomer and PP prices in March with potential to keep going even lower. Newell says “monomer tabs are expected to move downward from May through the fall” and he projects PP prices to follow suit.
Newell says February demand was very weak as there was a clear response from the industry to the sudden, whopping increases. While some rebound in demand is likely, Newell says he does not expect much more growth this year over that of the last two years.
PS Prices Down
Polystyrene prices fell across the board in February leaving only a penny in place from the January hike. Both moves were attributed to benzene price swings, according to Mark Kallman RTi’s director of client services for engineering resins, PS and PVC. Benzene prices dropped again in March and were expected to drop even further in April as world oil prices continue their downward slide. PS prices are likely to be flat if not slightly lower. Despite dropping benzene prices, scheduled styrene monomer plant turnarounds were expected to make supply a bit snug, according to Kallman. A seasonal uptick in the lackluster demand for PS is expected through the second quarter.
ABS Prices Up
ABS prices moved up the end of February and implementation of January increases was supported by rising prices of offshore ABS, particularly from the Far East, which had been very competitive. Their move was attributed to cost increases from feedstocks especially benzene. RTI’s Kallman thinks "Suppliers had issued price increases for March which were expected to be felt in April but perhaps not in their entirety, because most key feedstocks were dropping." Domestic ABS demand was reasonable in the first quarter supported primarily by automotive. Kallman projects some increased demand in the 2nd quarter from pipe and fittings as well.
PC Prices Flat to Down
Polycarbonate prices were largely flat or lower due to competitive activity and suppliers failed to implement their January price hikes but new price hikes for the second quarter were forming. Kallman from RTI, “expects suppliers will have some success in raising prices” and he thinks suppliers will be able to implement about 1/3 of their new hikes because propylene and benzene prices dropped and are expected to fall further. Domestic automotive demand for PC has been good and improvements are anticipated in the construction sector in the coming months although not expected to reach the highs of 2007. Poor demand in Europe and slow growth in Asia, evidenced by production cutbacks (including SABIC shutting down for 10 weeks) has started to cut into US PC exports.
Nylon Prices Flat
Nylon 6 and 66 prices held even through the first quarter. In the case of Nylon 6 prices didn’t budge due to domestic and import competition as well as low caprolactam prices. With benzene prices dropping the chances of implementing a price hike are even lower, according to RTI’s Kallman. Domestic demand for Nylon 6 has been relatively good in fibers and some injection molding applications. Significant new Nylon 6 fiber capacity in Asia has cut into domestic exports. Meanwhile, low butadiene prices helped keep Nylon 66 prices relatively stable despite spikes in propylene monomer and benzene early in the year. If butadiene prices move up again suppliers could well hike nylon prices before the end of this quarter. But if benzene prices are low that would be difficult, cautions Kallman. Demand for Nylon 66 has been steadily good particularly in automotive and an increase is expected in the electrical sector as the construction season gets under way.
These prices and trends are especially important to a custom injection molder like Crescent Industries who manufactures custom plastic components using all of these resins. For more information on Crescent Industries, please click here.