HOUSTON, Feb. 26, 2013 /PRNewswire/ -- Prices for the plastic used to make plumbing pipes have shot up in February and are set to rise again in March as supplies become strained and raw-material costs increase, according to the chemical industry report, PetroChem Wire. Some other plastics saw their prices decline in a month that produced no clear direction in price trends.
Polyvinyl chloride, more commonly known as PVC, saw prices rise by 5% during February due to some lack of availability and raw material costs. PVC producers have proposed raising prices a further 8.8% in March, citing a recent series of outages at production plants in Louisiana and Texas. PVC is used widely in the construction industry to make pipes, and is also used in the manufacture of linoleum, among many other consumer products.
Prices for polyethylene, another key plastic used in the manufacture of consumer goods, such as plastic bottles and trash bags, were also higher. Rising costs earlier in the year for ethylene, the key chemical use to make polyethylene, are behind the firmer price for the plastic. U.S. polyethylene prices rose 5.7% during the first quarter of 2013. Ethylene itself saw its prices jump by nearly 30% between early December and late January, threatening the profitability of certain plastics' manufacture. Ethylene's spike found a plateau during the first quarter, however, with pricing increasing 3% as polyethylene margins recovered somewhat. Polyethylene is so widely used in the manufacture of packaging, consumer goods and industrial products that it is considered by many to be as ubiquitous as fuel.
Unlike ethylene-based polyethylene and PVC, prices for two other widely consumed polymers -- polypropylene and polystyrene -- saw declines and show signs of continued weakening. Polypropylene prices have dropped 3.5% during February alone. Supplies of this plastic resin are said to be abundant, and so buyers have shown caution about building inventory in a falling market. As a result, order cancellations have been reported recently in this market. Polypropylene is widely used in the automobile industry and also in the carpet industry, as well as in certain components of packaging such as plastic bottle caps.
Polystyrene prices have fallen 4.7% so far in February, mostly based on declines seen in the upstream benzene market, which has followed crude oil trends. Polystyrene is best known for its packaging uses as "clamshells" for food to-go boxes and also as packing peanuts. It is also used in the manufacture of jewel cases for CDs and DVDs.
The PetroChem Wire is a daily newsletter about US commodity petrochemical markets. It counts every major petrochemical and refining company among its readers, as well as many major manufacturing concerns, global conglomerates, industry consultants, equity analysts and government agencies. It also produces maps of chemical plants and pipeline systems. For more information, visit www.petrochemwire.com.
SOURCE PetroChem Wire