Resin prices to decline on crude - US Sealed Air

26 January 2009 22:31  [Source: ICIS news]

HOUSTON (ICIS news)--US food and industrial packaging converter Sealed Air expects its 2009 resin costs to decline based on an average crude oil price of $57/bbl, the company said on Monday.

The expected crude oil price is 43% below the average price of $99.55/bbl in 2008, it added.

“Through 2008, the impact of resin was something over $120m [€92m] as additional costs versus 2007, and if you then take that back the other way in terms of 2008 versus 2009, we’re looking at something in the $100m range,” said chief executive William Hickey in a conference call with investors.

The company said it was able to recover 95% of its incremental resin costs in 2008.

Sealed Air uses resins such as polyethylene (PE), polypropylene (PP) and polystyrene (PS) to manufacture a variety of packaging products.

Hickey said he expected low single-digit sales-volume declines in 2009, based on continued slowing in the first half followed by a gradual but “tepid” recovery in the second half.

He declined to comment on early January sales figures, but said some customers were replacing inventory after destocking at the end of 2008.

($1 = €0.77)

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By: David Barry
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