Plastics pricing roundup: Material irrespective, the prices all move in the same direction

The past days have brought a handful of pricing announcements from suppliers and, no surprise, all indicate price hikes are on the way. Thermoset plastics, thermoplastics, fillers, specialty materials—the prices for all are moving higher as suppliers work to cover the increasing cost of raw materials.

The rising cost of raw materials is a major issue for any number of industries. Since the start of 2010, prices have risen for oil (+16.3%), platinum (+21.8%), coffee (+76.9%) and copper (+31.3%), for example. As we recently reported, the prices last year for many commodity plastics also rose. For the year, processors had to spend about 19% more for HDPE in December 2010 as they did at the start of 2010, about 19% more for PP and some 14% or so more for GP-PS.

This year seems a continuation of the movement higher up the scale. Recent announcements include the one by Interplastic Corp. (St.Paul, MN) that the company's thermoset resins division is raising the price by $.08 per pound of its polyester and vinyl ester resins, gel coats, colorants and putties. This increase will take effect on all shipments on or after February 5, 2011.

According to Interplastic, increases in raw material prices, in particular those of propylene and benzene, are to blame.

Rextac LLC, supplier of amorphous poly alpha olefins (APAO), which are used usually as hot melt adhesives, announced a general price increase of $0.12/lb for all grades of its APAOs, effective Jan. 15, 2011 or as contracts allow. Again, the escalating price of raw materials is cited as the reason driving the increase, with propylene again singled out as the raw material whose price is causing problems.

In the additives and fillers world, Evonik Carbon Black GmbH, a subsidiary of Evonik Industries (Essen, Germany), is increasing prices for carbon black pigment grades and pigment black preparations by up to 10 %. The price increase will be effective for all deliveries on or after February 15, 2011.

Plastics pricing service ChemOrbis (Istanbul, Turkey) shared with Plasticstoday.com that it has seen propylene prices move higher over the past week in Asia, Europe and the U.S. as tight supplies in Europe and the U.S. buoyed prices in these regions while Asian prices also moved higher as Asian sellers began to look into the possibility of concluding export deals with American and European buyers.

What do processors think of the increases? This week the IK, a 300-plus-member company trade group representing Germany's plastics packaging processors, this week released its quarterly IK Economic Trend, an industry barometer for the plastics packaging industry. According to this survey, the plastics packaging processors expect a positive economic development for the first quarter of the year, with 60% of IK members describing the current economic situation as good.

The survey also reveals that more than 60% of company representatives expect higher prices for their packaging, with 72% expecting to pay more for their raw materials.