Townsend Plastic Industry News

PP Copolymer Pricing Update

2012-05-17T14:41:48Z

According to Townsend's Plastic Market Monthly Report, PP Copolymer resin prices increased slightly in April from March levels for most grades. The PMM's volume-weighted average for all PP Copolymer resin grades increased only 0.6 cents-per-pound (cpp) to 97.3 cpp. The largest increases, 1.2 and 1.1 cpp respectively, were felt by buyers of Injection Molding, Low-Med Impact and Injection Molding-Random resin grades.

Suppliers had sought as much as a 5.0 cpp increase for April, but nearly all of that was held off after the rollover in the April propylene contract. Propylene has already settled down 10.0 cpp for May, and this may very well support a drop in propylene resin prices for the month, with some market participants predicting further price erosion for June.

PP Copolymer resin buyers reporting to the PMM are forecasting the volume-weighted average for all grades to decrease by 9.0 cpp in May.

Townsend’s PMM benchmarks monthly transactional resin prices for PS, PVC, PP Copolymer, PP Homopolymer, PET, LLDPE, LDPE, HDPE Molding and HDPE Extrusion in the US and Canada. To participate in the benchmark or obtain subscription information please contact Terry Ulery at +1-281-873-8733 Extention 133 or email tulery@townsendsolutions.com.

Bio-based PLA, PHA, PBT and PEF Gaining Traction

2012-05-14T19:45:06Z

Polyethylene terephthalate (PET) and polystyrene, both big players in the packaging industry, may have some competition as more companies look for sustainability options for their packaging needs. Bio-based PLA, PHA, PBT and PEF are beginning to look like more viable option, which could spell trouble for the legacy plastics.

Polylactic acid (PLA), polyhydroxyalkanoate (PHA), polybutylene terephthalate (PBT) and polyethylene furanoate (PEF) are examples of polymers now being developed from bio-renewable resources. PLA is positioned to compete with PET in thermoforming applications, but not in bottle application due to poor barrier properties. However, PEF - with its better heat and barrier properties - has the potential to replace PET. PHA appears to be useful in several other industry segments including agriculture, medical and single-use food service where degradation is valued in packaging.

The largest producers of bio-based polymers include US-based NatureWorks and the Dutch companies PURAC and Avantium. Major brand owners currently using bio-based packaging include, PepsiCo, Coca-Cola, Stoneyfield Farms and France’s Danone. Some industry insiders expect demand for bio-based, biodegradable plastics will more than triple by 2015.

HDPE Pricing Update

2012-04-24T16:24:43Z

According to Townsend’s Plastic Market Monthly Report, HDPE resin prices rose again in March for the fourth consecutive month as most suppliers pushed through the remainder of the 6.0 cents-per-pound (cpp) price increase they sought in February. The PMM’s volume-weighted-average for HDPE Extrusion resin grades rose 2.9 cpp, while HDPE Molding resin grades increased by an average of 2.4 cpp. The increases were mostly due to a tightened supply resulting from the heavy spring turnaround season and several unexpected cracker outages.

Most HDPE resin buyers reporting to the PMM do not expect their HDPE resin prices to increase in April. This seems supported as it has just been announced that the price increase suppliers sought for April has been pushed and likely won’t be passed on to buyers until May and June. Market sources continue to speculate on the possibility of lower prices over the next few months if the turnaround season ends in May without complications.

The American Chemical Council reported Domestic HDPE resin production increased by a healthy 12.80 percent in February compared to the same month in 2011. Resin sales to Pipe and Conduit extruders increased significantly by 19.52 percent in February compared to the same time last year, with extruders of Non-Corrugated/Gas Distribution pipe showing a dramatic increase of 65.05 percent when compared to February 2011.

Townsend’s PMM benchmarks monthly transactional resin prices for PS, PVC, PP Copolymer, PP Homopolymer, PET, LLDPE, LDPE, HDPE Molding and HDPE Extrusion in the US and Canada. To participate in the benchmark or obtain subscription information please contact Terry Ulery at +1-281-873-8733 Extention 133 or email tulery@townsendsolutions.com.

Latest Development in the Shale Gas Play

2012-03-20T18:38:28Z

The recent announcement by Shell to locate its new $2 billion ethane cracker plant in Beaver County, Pennsylvania has most reacting with well-placed enthusiasm at what it will mean for the economy in the region as well as the effects it will have on the downstream plastics industry. The location is strategically close to the shale gas abundant tri-state region bordering Ohio and Pennsylvania and is only 35 miles from Pittsburg, the city that is quickly laying claim as the capital of shale gas drilling in the Appalachian region.

The American Chemistry Council has estimated that more than 10,000 new permanent jobs in the chemical and supplier industries could result from a cracker located in the region. Shell estimates an additional 10,000 temporary construction jobs would also be created. Some estimates claim as much as $15 to $20 billion of new economic incentives could result.

The decision to actually build the plant is still a couple of years away as a land option agreement has just been signed with Horsehead Corporation, who must relocate their zinc production facility currently operating at the preferred site. Time well spent as Shell continues with an environmental analysis of the site, further design studies, and continued study of the economic feasibility of the project.

Townsend Solutions will be following the project closely as it will undoubtedly have a tremendous effect on the plastics industry. As a leading global provider of business intelligence for the petrochemical and plastics industry, Townsend is in a unique position to study the downstream economic impact of the shale gas boom and has launched a collaborative market study entitled “The Effects of Shale Gas on the North American Converting Industry.” The study is slated for publication during the 3rd quarter of 2012. For more information please contact Frances Davidson at +1-281-873-8733 Extension 120 or email fdavidson@townsendsolutions.com . Visit our customer portal to download recent industry presentations, technical papers and brochures - http://customer.townsendsolutions.com/

Copyright 2011 Townsend Solutions. Visit www.townsendsolutions.com for more on the global plastics industry.

Effects of Shale Gas on the North American Converting Industry

2012-01-28T22:03:01Z

Recent announcements by Shell, Chevron Phillips, Dow and NOVA make it very clear that the polyolefins market in North America will change drastically over the next decade.

The suppliers are banking that the feedstock cost advantage of ethylene from shale-gas-derived ethane will be sustainable and will be the future of the industry, but there are still a lot of questions about what exactly all this means for converters of polyethylene.

Townsend Solutions has a team of research experts dedicated to looking at the impact shale gas will have on the polyethylene industry as they put together Townsend Solutions’ North American Collaborative Market Study: The Effects of Shale Gas on the North American Converting Industry. Some of the research team’s early findings are quite interesting.

The primary effects of the new supply will be felt in the area surrounding the Marcellus shale gas reserve – which will include the Northeastern, Mid-Atlantic and Midwest United States. While there is already a heavy concentration of converters in those areas, the increased PE supply is sure to attract more, and Townsend’s researchers are digging in to discover exactly what that increased competition will mean in terms of everything from PE prices to logistics issues and availability of equipment. Also, beyond the regional impacts, researchers are investigating the potential for inter-material competition, import-export changes and much more.

“The recent shale gas discoveries have cast a lot of uncertainty on the North American and global PE markets, and there is great potential for the downstream market,” said David Anderson, Business Director – Global Polyolefin Consulting at Townsend. “We are excited about this study and exploring the implications of potentially less expensive ethylene monomer on the supply of PE polymers and how this will impact plastic converting business growth and the shifting business dynamics surrounding where plastic goods are produced.”

For more information about Townsend Solutions’ North American Collaborative Market Study: The Effects of Shale Gas on the North American Converting Industry, contact Frances Davidson at +1 281 873 8733 or email fdavidson@townsendsolutions.com.

Copyright 2011 Townsend Solutions. Visit www.townsendsolutions.com for more on the global plastics industry.

EVA Market Update and Hold on Tosoh Expansion Project

2012-01-19T17:00:52Z

According to the January edition of Townsend’s Monthly Global EVA Market Intelligence report, US and China have seen positive growth in EVA consumption for 2011. But, since the peak in July there has been a drop in EVA resin purchasing in other regions of the world, specifically Other Asia Pacific and Central South America. There was a marked decline in buying interest among customers in the Other Asia Pacific region as customers reviewed their inventories and projections for year end. China is over capacity on encapsulation sheet grades and Townsend market experts are predicting a depletion of stock. For the most part, prices have declined for all types of EVA in the last half of 2011. Western Europe has seen a recent decline in the photovoltaics segment but with orders in other markets making up the difference, the demand for EVA has been normal.

Earlier this month PlasticMarketData reported on planned capacity announcements in Asia, including an announcement for a 2013 expansion at Tosoh’s EVA production line at the Nanyo, Yamaguchi Japan plant. According to a recent statement by Tosoh “they currently have no announced plan for this expansion and the project is currently on hold." We stand corrected, and apologize for the oversight.

For the latest on global EVA demand, capacity and pricing contact Frances Davidson at +1-281-873-8733 Extension 120 or email fdavidson@townsendsolutions.com.

New Townsend Market Intelligence Report: EVA Global Market Monthly

2011-12-08T15:15:53Z

First in a series of planned Market Intelligence Reports, Townsend’s EVA Global Market Monthly reports on EVA pricing & capacity changes around the world. Covering six key regional and global markets for EVA resin, the monthly intelligence reports cover current market activities, trends & drivers and transactional resin pricing (by %VA content range).

“This report fills a significant gap in EVA market intelligence” states David Anderson, Director of Consulting for Houston based market research firm Townsend Solutions. "Townsend is set to report on monthly pricing, trends and issues affecting growth in EVA markets around the world so our clients can be fully informed by the end of the first week of every month. This real time reporting is key for EVA buyers, petrochemical producers and other suppliers to the global EVA supply chain."

The EVA market was expected to see "robust" growth of upwards of 10% globally in 2011. This has been stalled by a variety of factors including unexpected slowdowns in key growth areas like solar cell applications. Stay informed with monthly updates! For subscription information and a free sample report contact Frances Davidson at +1-281-873-8733 Extension 120 or email fdavidson@townsendsolutions.com.

Townsend to Survey European HDPE & LDPE/LLDPE Buyers

2011-11-20T18:10:24Z

Beginning in February, more than 3,500 European Polyethylene processors will have the opportunity to provide extensive feedback to their resin suppliers regarding product and service offerings via the global market research firm, Townsend Solutions.

CLASS PE Europe is sponsored every two years by major resin suppliers serving the European plastic processing marketplace. Rich in historical data, this program has evolved over the years to become the industry standard for measuring customer satisfaction in the plastics processing marketplace. Variables impacting survey design and demographic coverage are collaboratively designed by steering committee comprised of representatives from both Townsend and subscribers to the program. This meeting will be held in Frankfurt Germany in early January 2012.

For information on participating, or to launch a CLASS customer satisfaction program for your business contact bmitchell@townsendsolutions.com or call +1-281-873-8733.

Copyright 2011 Townsend Solutions. Visit www.townsendsolutions.com for more on the global plastics industry.

Plastic Market Monthly: PET Pricing Update

2011-11-20T17:46:42Z

According to Townsend's Plastic Market Monthly Report, bucking previous industry predictions of
continuing rising costs, PET resin prices headed downward again after only a slight upturn in September. This is mostly due to lower feedstock costs and lower demand. All indications are that prices will continue to decline for the short term. The PMM’s volume-weighted-average for PET in October decreased 2.9 cents-per-pound, C-PET saw a 3.6 cpp decrease while all other grades, Bottle, A-PET and Wide-Spec, experienced decreases ranging from 2.5 to 2.7 cpp.

Recent increases in PET recycling may have an impact on the virgin resin market in due time. After staying flat for two years, the volume of PET bottles recycled in the U.S. in-creased in 2010, pushing the recycling rate close to 30 percent for the first time since 1996. PET recycling also got a boost from higher sales in the bottle market.

Market sources report Coca-Cola is still trying to sell its PET recycling plant in Spartanburg, S. C., which is currently operating on a limited basis. The plant is a joint venture with United Resource Recovery Corp. Houston-based M&G is scheduled to open a plant in Corpus Christi, Texas sometime in 2014. This plant will have more than 2 billion pounds of annual PET capacity. This venture will make M&G the region’s largest producer of PET.

Copyright 2011 Townsend Solutions. Visit www.townsendsolutions.com for more on the global plastics industry.

Plastic Market Monthly: LLDPE Pricing Update

2011-11-20T17:38:54Z

According to Townsend's Plastic Market Monthly Report, LLDPE resin prices experienced a significant price drop in October. A decrease in ethylene contract prices for the month, plus a wildly fluctuating spot market, coupled with lower demand gave LLDPE resin buyers some welcome relief in October. The volume-weighted average for all LLDPE resin grades dropped 2.8 cents-per-pound (cpp) in October. Resin deliveries were virtually unchanged in October compared to September levels, and converters maintained their inventory levels at ten days of supply.

Copyright 2011 Townsend Solutions. Visit www.townsendsolutions.com for more on the global plastics industry.

Heat Stabilizer Market Changing

2011-09-07T18:40:58Z

The global heat stabilizer market is expected to have increased growth through 2015. Heat stabilizers fall into three main categories: Mixed metals (BaZn, CaZn, CdZn), Tin based, and Lead based. Lead based stabilizers were the highest volume in 2007, but due to toxicity and environmental concerns, they are on the decline being replaced by the other types. New developments include safer organic and rare earth stabilizers, but market penetration is slow due to higher cost. In Europe, heat stabilizers have moved from Barium Zinc to Calcium Zinc (BaZn to CaZn). Industry players expect the same transition in North America and other regions of the world.

Per Townsend Solutions, a global consulting firm, heat stabilizers are used to prevent the thermal degradation of certain polymers during periods of exposure to elevated temperatures. The main application for heat stabilizers is to stabilize polyvinylchloride (PVC), derivatives of PVC and blends.

Virtually all rigid and flexible PVC utilizes some type of heat stabilizer, especially extruded PVC to prevent degradation during processing. Extruded PVC is used in Wire and Cable, Film and Sheet, Pipe, Window Frames, and Fencing. Therefore, heat stabilizers are very dependent on the strength of the PVC market.

From the list above, one can see that the extrusion PVC market is closely tied to the residential housing and commercial building market. If we look at the global PVC market in the developed regions like North America and Western Europe where the housing and construction markets have been depressed since the global financial crisis, PVC consumption has been on a steady decline. For example in the US and Canada, the extrusion PVC sales were down nearly 38% from the highs in 2006. Through July 2011 sales of PVC resin for extrusion applications in the US and Canada was 4 billion pounds versus 2006 levels where January to July sales were 7.2 billion pounds.

However, in the developing regions like China, India, and the Middle East, the housing and construction markets continue to grow. China became the largest market for heat stabilizers in 2007, surpassing both North America and Western Europe combined. The region has experienced double digit volume growth for more than a decade.

Townsend publishes a Global Plastics Additives report every three years. The most recent study provides an assessment of 2011 demand and supply, with an outlook to 2016. For more information about Townsend’s market study of Heat Stabilizers, Antiblocking Agents, Antioxidants, Antistatic Agents, Biocides, Chemical Blowing Agents, Coupling Agents, Flame Retardants, Impact Modifiers and PVC Processing Aids, Light Stabilizers, Lubricants/Mold Release Agents, Nucleating/Clarifiying Agents, Organic Peroxides, Plasticizers, Slip Agents, and Additive Producers, please contact Frances at fdavidson@TownsendSolutions.com.

Copyright 2011 Townsend Solutions. Visit www.townsendsolutions.com for more on the global plastics industry.

2011 Mid-Year Review of North American HDPE Pipe Market: Strong Demand Continues

2011-08-16T15:38:54Z

From new drainage systems for golf courses to the rebuilding of North America’s infrastructure, PE pipe & conduit is experiencing resurgence in growth similar to what was seen in pre-economic crisis times. In the 2011 Townsend Polyethylene Report, we reported a nearly 21% jump from 2009 – 2010 in PE consumption for the pipe & conduit market for all PE resin types. About 90% of the market uses HDPE in pipe & conduit applications. While many other PE markets have retracted somewhat from the remarkable 2010 rebound, during the first half of 2011, HDPE for pipe & conduit is showing continued high growth of over 16% compared to first half of 2010. The highest growth is in the non-corrugated applications including potable water, gas distribution, industrial/sewage, and conduit.

In the 2002 – 2007 time-frame, HDPE for pipe & conduit applications grew at an average annual growth rate (AAGR) of 8% / year. Then the economic slow-down of 2008 and 2009 took a huge toll on the HDPE pipe market, falling nearly 30% from 2006. Now, if the first half of 2011 demand continues at the current pace, 2011 HDPE demand will approach the peaks seen in the 2006 – 2007 period. Driven by a ever increasing demand for the replacement of decaying utility piping infrastructure and the growing acceptance of HDPE, the market opportunities for HDPE pipe are numerous and sizable.

According to the Townsend Plastic Buyers Database, there are about 225 PE pipe manufacturing sites in all of North America. The major producers of HDPE pipe have changed considerably in the last 10 years due to mergers, acquisitions and divestitures. Of note: Advanced Drainage Systems purchased Hancor making it the largest HDPE pipe producer, the Rinker Group divested the plastic pipe and liner operations creating “Polypipe”, Arnco and Dura-Line merged to create A-D Technologies, and USPoly Company, J-M Manufacturing and PW Eagle combined to form JM Eagle. The Top 5 producers ADS / Hancor, Performance Pipe, JM Eagle, PolyPipe Inc., and A-D Technologies account for 55% of the HDPE pipe market.

Of the suppliers of HDPE resin for pipe, Chevron Phillips has the largest market share, followed by INEOS and Dow Chemical.

Over the last 10 years, we have seen the market shares of ExxonMobil, LyondellBasell and resin sold through distribution grow while Chevron Phillips’ share is lower and the remaining producers have mostly maintained their market shares.

On a global basis, Townsend forecasts the pipe market to have the highest growth of all the major processes through 2015. This is driven not only by emerging markets like China, India, Middle East and Central and South America “building new” infrastructure, but by the established markets like North America “replacing antiquated” infrastructure. Townsend’s multi-client report on bi-modal HDPE, an important grade for pipe, is scheduled to publish in October 2011. For more information regarding any of Townsend’s services including the Townsend Polyethylene Report, Townsend’s Plastic Buyers Database, Townsend’s Plastics Market Monthly (resin pricing) or cost modeling contact Frances Davidson at 281 873 8733 Ext. 120 (fdavidson@townsendsolutions.com) or Peter Callais at 281-873-8733 Ext. 150 or via email at (petercallais@townsendsolutions.com).

The Braskem / Dow Deal: A Win-Win for Both Companies

2011-07-29T17:36:17Z

The Brazilian based company, Braskem, has announced their intended acquisition of Dow’s Polypropylene business. This is a deal that is extremely convenient for both companies according to their future strategies. Based on the recently published 2011 Townsend Polypropylene Report, we forecast the North American and Western European markets to grow at only 2.5% and 2.1%, respectively, per year in the next 5 years, well below the forecasted global PP growth rate of 5.0%/year. However, this acquisition isn’t justified from a market perspective alone.

It’s been some time since Dow signaled that their PP business was not in its future strategy. Low margins, especially in the US, a commodity based product line (non-technology-differentiated) and a necessity of new investments to keep the business growing were some of the reasons for this divestment. As stated by Andrew N. Liveris, Dow's Chairman and Chief Executive Officer recently: “This business has delivered historic margins that do not meet our expectations moving forward and is no longer core to Dow’s strategy. We are shifting our Plastics portfolio from a commodity focus to that of a performance focus. This divestment is directly in line with that strategy, and allows us to continue to focus on our three main priorities: retiring debt, remunerating shareholders and investing in our innovation agenda so that we deliver consistent earnings growth.”

Since 2002, Braskem has had aggressive expansion through acquisitions and strategic alliances, in order to position itself as one of the largest global petrochemical companies. With this acquisition, Braskem becomes the #2 polypropylene producer in North America and gains a foothold in Western Europe, a region that was being served only by a Braskem sales office. Also with this acquisition, the company acquired an amazing platform of innovative PP products such as the INSPIRE™ Performance Polymers. It’s important to mention that the catalyst and technology businesses are not part of this deal and are being kept by Dow. Braskem continued to generate good margins with its operations globally, generating EBITDA in 1Q2011 US$ 570 MM. At this acquisition price (US$ 340 MM, 6.7x PP Dow EBITDA) neither its cash flow nor its “Investment Grade” will be affected. When this purchase is final, Braskem will have a global position in the polypropylene market and will continue to strengthen its position in polyethylene with their new investment in Mexico with Idesa.

Could this be the first sign of a growing trend? As we see more announcements of investments in the US and Canada due to increased availability of shale gas, Townsend believes this will create new mergers and acquisitions opportunities around the world as companies look to better position themselves in the global polyolefins marketplace.

For more information on the polypropylene industry or to obtain a copy of our newly released 2011 North American and Western European Polypropylene Market Study reports please contact Roberto Ribeiro at +1-281-873-8733 Extension 155 or email rribeiro@townsendsolutions.com .

Double Digit Growth Rates for PP Consumption in Central/Eastern Europe… Wow!

2011-07-13T21:00:24Z

Following a decline of -7.1% in 2009, the consumption of Polypropylene in Central/Eastern Europe bounced back with an amazing growth of 21.5% in 2010, on account of higher domestic and export demand for plastic products. While the area was hit hard by the global financial crisis in 2009, strong GDP growth averaging 4.1%/year is projected for the next five years, sustaining. This growth will be supported by (1) ongoing industrialization and infrastructure development, (2) strong growth in consumer products, and (3) Russia’s major investment in new oriented PP film lines.

In terms of capacity, several new PP plants have been brought on-stream in this region over the past few years and six new plants are currently being planned for the region and are scheduled to come on-stream during 2011 to 2015. New plants are planned for Russia, Uzbekistan and Kazakhstan. With these capacity additions, the region is expected to have a net surplus of PP, with net imports dropping from 995 kt in 2010 to 867 kt by 2015. Of note, CEE will move from to a net import position in 2010 of 419 kt to a balanced foreign trade position and be a net exporter of 5 kt in 2015.

Townsend’s 2011 Central & Eastern Europe Polypropylene Market Study is available now. To obtain a copy of this report please contact Frances Davidson at +1-281-873-8733 Extension 120 or email fdavidson@townsendsolutions.com .

Copyright 2011 Townsend Solutions. Visit www.townsendsolutions.com for more on the global plastics industry.

Townsend Projects North American HDPE / LLDPE / Swing PE Capacity to Lag Behind Consumption by 2015

2011-07-11T21:15:23Z

Newly published research by Townsend Solutions reports that North America’s HDPE/LLDPE/Swing PE consumption is projected to increase from 12,230 kilotonnes in 2010 to 14,857 kilotonnes in 2015. At the same time, average HDPE/LLDPE/Swing PE capacity for the region is forecast to increase from 15,541 kilotonnes in 2010 to 15,866 kilotonnes in 2015. This means that, in the absence of further capacity announcements, the consumption/capacity ratio for low pressure PE in North America will increase from 78.7% in 2010 to 93.6% in 2015.

The 2011 Townsend Annual Polyethylene Report detailing global consumption, capacity and trade is available now. To obtain a copy of this report please contact Peter Callais at +1-281-873-8733 Extension 150 or email petercallais@townsendsolutions.com.

Polystyrene Pricing Update

2011-07-11T20:39:16Z

Polystyrene resin prices fell in June as feedstock prices dipped but the declines were hampered a bit by tight supply caused by several plant outages in May and June.

Both ethylene and benzene contract prices were down in June. The volume-weighted-average for Polystyrene Crystal resin grades dropped 2.2 cents-per-pound (CPP), while the volume-weighted -average for HIPS resin grades fell 2.1 cpp in June.

More than three-quarters of the Polystyrene resin buyers reporting their prices to the PMM (Plastic Market Monthly) reported lower prices in June.

PMM data providers are projecting a 2.8 cpp decline in the volume-weighted-average price for Crystal Polystyrene resin in July and a 2.0 cpp decrease in HIPS resin prices.

Townsend's PMM benchmarks monthly transactional resin prices for PS, PVC, PP Copolymer, PP Homopolymer, PET, LLDPE, LDPE, HDPE Molding and HDPE Extrusion in the US and Canada. To participate in the benchmark or obtain subscription information please contact Terry Ulery at +1-281-873-8733 Extension 133 or email to tulery@townsendsolutions.com.

Copyright 2011 Townsend Solutions. Visit www.townsendsolutions.com for more on the global plastics industry.

Polypropylene Consumption in North America Bounces Back Strong After Recession

2011-06-22T16:44:12Z

According to the recently published Townsend Polypropylene Report on Global Consumption, Capacity and Trade, polypropylene (PP) consumption increased 7.3% in the US, Canada and Mexico in 2010, the first year since 2004 that consumption has grown. Although consumption was dramatically reduced in 2008/2009, the strong recovery can be attributed to the stimulus package for autos and appliances and restocking of the supply chain which was de-inventoried during the recession. Mexico’s growth was 13.2%, nearly double its more developed neighbors. Townsend forecasts modest growth in PP consumption at about 2.5% AAGR in the countries comprising NAFTA for the period 2010 to 2015, with the strongest growth in the automotive, sheet and non-woven segments.

For more resin-specific consumption and growth forecast data by world region, process, market or application segment please contact us via email or call +1-281-873-8733.

Japanese Crisis Continues to Impact PVC Supply/Demand

2011-05-17T16:14:00Z

PVC resin prices in the US and Canada continue to gradually push upward as Ethylene prices climb higher and demand strengthens in an already tight PVC market.

According to Townsend’s Plastic Market Monthly, 90% of buyers who reported their April pricing to our market analysts experienced increases in the prices they paid for PVC resin, with the average price for all PVC resin grades climbing 2.8 cents per pound in April to 46.8 cpp.

Traditionally, exports have taken up the slack in sales resulting from sluggish demand for PVC in the US construction and housing industry, which accounts for three-quarters of all domestic PVC demand. Seasonal demand in the domestic PVC market is expected to rebound causing cuts in export production which will further tighten the market and help fuel price increases.

The crisis in Japan also had a significant impact on US PVC supply/demand. Imports from Japan plummeted, as expected, due to plant outages caused by the earthquake and tsunamis. Three PVC plants, with a combined capacity of 818,000 mt/year, representing 41% of Japan’s total PVC production, shut down. Demand for US resin from countries normally importing from Japan is causing shortages to some US buyers.

At present time, Japan is still dealing with rolling blackouts and the looming summer power usage restrictions, which will likely disrupt pipe factory operations; however, most plants are expected to resume operations by the end of May. Taking into account the situation in Japan coupled with high oil prices, PVC resin prices appear likely to continue their upward climb, at least in the immediate future. Email Terry to receive a sample PVC Pricing Report.

US Ethylene Contract Prices Climb Higher

2011-05-09T19:50:00Z

Ethylene contract prices climbed higher again in April, settling up another 3.5 cpp for the month at 57.25 cpp, with more increases expected in May.

Any relief in sight? Hopefully. Crude oil prices did dip in the first week of May, falling below $100 barrel for the first time in weeks. There is also a lot of talk among ethylene producers about adding capacity in the next few years. The recent discovery of large quantities of natural gas in shale rock throughout North America is providing a new, less expensive option for ethylene feedstock and production.

Last month, Dow Chemical, Chevron Phillips Chemical, Nova Chemicals and Westlake Chemical all announced plans to increase North American ethylene production. LyondellBasell also threw its hat into the ring in early May with the announcement by CEO Jim Gallogly the company is looking at expansions at existing plants, possibly in Channelview and La Porte, Texas, in the next few years that will increase ethylene output by about 500 million pounds a year. The company is also reportedly considering the construction of a cracker in a joint venture with other producers.

Copyright 2011 Townsend Solutions. Visit www.townsendsolutions.com for more on the global plastics industry.

Propylene Monomer Prices Expected to Reach Record Highs in April

2011-04-19T20:39:00Z

Propylene monomer prices are expected to reach record high levels in April – rising as much as 20% in one month – and that increase and possibly more is expected to be passed on to Polypropylene buyers very quickly. Supplier nomination letters are coming with a flurry, announcing double-digit increases, mid-month increases and pricing levels that have never been seen before in the Polypropylene market.

Tight propylene supply is to blame after a large number of first quarter 2011 refinery turnarounds. More than 20 US refineries were offline for at least some time during the first three months 2011. High crude oil prices also play into the mix. Not surprisingly, demand for PP has dropped and some processors are looking into material substitutions, but with long approval processes and higher polyolefin cost across the board, many are simply stuck paying the higher prices.

Savvy resin buyers monitor real transactional pricing. Townsend’s Plastic Market Monthly (PMM) is the only pricing publication based on real transactional prices reported directly by resin buyers and covers 11 unique PP resin grades. Each monthly report contains historical pricing data, pricing projections for the upcoming month, monomer and feedstock pricing, current economic data affecting the markets, insight on inventory levels, and news about current supply, demand and market conditions. In exchange for transactional data, qualified PMM subscribers receive preferential pricing on annual subscriptions and access to more than 20 years of historical price data. Email Sue Thackeray to receive the April PP Pricing Reports.