FocusUS PC market argue on success of May hikes

28 May 2008 21:40  [Source: ICIS news]

By Ben Lefebvre

HOUSTON (ICIS news)--The US polycarbonate (PC) market has entered a state of confusion, as buyers and sellers are opposed as to whether price increases announced for May were actually implemented, sources said on Wednesday.

A supplier said it had partly realised the 9 cent/lb ($198/tonne or €127/tonne) increase it and competitors announced for 1 May, although it stressed that the increases varied among market segments and customers. 

“I think we did see upward movement in overall pricing,” the supplier said.

But distributors and suppliers of varying size and locations insisted PC prices had not budged since June 2007, thanks to lackluster demand from the automotive and construction industries and supply bolstered by imports selling for prices so low that one trader described them as “stupid”.

“Every time a (PC) increase goes out, it goes nowhere,” one large distributor said. “It makes you lose respect for the petrochemical industry.”

Another PC buyer said price alerts producers sent him “seemed like propaganda”.

The disagreement has muddied the prospects of suppliers Dow Chemical and Saudi Basic Industries Corp (SABIC) Innovative Plastics succeeding in their latest price initiative. SABIC was said to be pushing a 9 cent/lb increase for 1 July while Dow said it would make its announcement that same day.  

It was unknown whether Bayer MaterialScience had nominated a price increase for the same period. 

PC spot prices were assessed at $1.38-1.42/lb bulk moulding and $1.33-1.38/lb bulk extrusion for the week ended 14 May, according to global chemical market intelligence service ICIS pricing.

Market participants agreed that a relentless rise in feedstock costs - especially for benzene, the average price of which has risen by 7%, to $1,281/tonne, since May 2007 - have slammed producers’ profit margins.

But buyers said demand was so light and supply so ample as to frustrate any attempt to push prices higher.

“I don’t believe it,” another distributor said of the supplier’s claims of price victory. “I see lots of cheap PC.”

($1 = €0.64)

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By: Ben Lefebvre
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