Focus story by Tracy Dang
HOUSTON (ICIS)--US polycarbonate (PC) prices were assessed on Wednesday at average increases of 5 cents/lb ($110/tonne), as buyers were willing to accept a portion of previously announced hikes on the back of higher raw material costs.
ICIS-assessed prices for bulk general purpose moulding grade PC rose to $1.70-2.02/lb ($3,748-4,453/tonne) DEL (delivered).
Supported by the 80 cent/gal spike in July contracts for upstream benzene, PC producers Bayer MaterialScience and SABIC Innovative Plastics had separately targeted price rises of 10 cents/lb, while Styron had sought a hike of 12 cents/lb.
Some buyers were able to negotiate rollovers in pricing, while several sources said that buyers had accepted partial increases of around 5 cents/lb.
"We ended up with a [3 cents/lb] increase on PC, but I have heard most increases are in the [5 cents/lb] range," one compounder said.
According to a supplier, 5 cents/lb was representative of the average increases, with some customers receiving rollovers, others paying the maximum amount and most accepting an increment of somewhere in between.
However, the source said that it could not grasp why the range for the increases was so wide.
"It's a very weird thing really," the supplier said. "Typically, in such a market, the price is really within the 3-4 cent/lb range. I don't really understand why. It's the same market for the same product."
Still, market sources were not expecting domestic producers to increase prices by "a whole lot" since they were still facing strong competition from suppliers in other regions, particularly Asia.
"We see a fairly large differential in prices offered by domestic producers vs. Asia ... depending on the producer, it can be up to [10 cents/lb]," one distributor said.
Meanwhile, US demand for PC was described as steady to strong, although supply remained ample.
Market participants are monitoring the status of the Dow Chemical plant in Freeport, Texas, from which major supplier Styron was sourcing PC.
Styron, which is in the process of changing its name to Trinseo, will terminate its contract with Dow during the second half of the year, after which time Dow will decommission and demolish the plant.
Major suppliers of US PC include Bayer MaterialScience, SABIC Innovative Plastics and Styron.
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