Crude oil, feedstock and polymer prices continue dipping in USA

30-Jan-07

Plunging crude oil and downstream feedstock prices this month have depressed transaction prices of most U.S. petrochemicals from a penny to 3¢/lb. Ethylene prices for the month have averaged 39¢/lb, down from the December price of 42¢. Slow demand affected sales and did not yield results to producers' attempts to boost prices by 2¢-3¢ from December. This, combined with softening of polyethylene demand, the chemical feedstock price cuts caused PE prices to slide by an average 2¢ per grade. After rejecting suppliers' attempts at boosting prices by 6¢/lb earlier in January, the market for polyethylene terephthalate (PET) appears to have settled into a stable price position, after spot prices for bottle-grade material rolled over. Producers plan to reduce supply starting in February, in a bid to push back prices back up. ExxonMobil will conduct a two-month turnaround at the Beaumont, Texas, olefins cracker starting at the beginning of February. Williams will conduct a turnaround at its ethylene cracker in Geismar, La., in February. Chevron Phillips is also planning to do maintenance at the Sweeny 24 unit in Texas beginning in mid-February. Flat styrene prices this month combined with weak demand, caused polystyrene spot prices to drop by 1¢/lb, thwarting the attempts of the PS suppliers of a pair of 3¢/lb price hikes-early in the month and again at mid-month. The recent downward adjustments in poly vinyl chloride (PVC) were prompted mainly by slipping feedstock costs and seasonal lackluster demand asequirements from the U.S. construction sector have dipped due to a slowdown in housing starts-and delays of a number of building projects.