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PetroChem Wire Brings Out Chemical Industry Report
Mar 01, 2013 (Close-Up Media via COMTEX) -- Copyright Close-Up Media, Inc. 2013. All Rights reserved

Prices for the plastic used to make plumbing pipes have shot up in February and are set to rise again in March as supplies become strained and raw-material costs increase, according to the chemical industry report, PetroChem Wire.

Some other plastics saw their prices decline in a month that produced no direction in price trends.

According to a release, polyvinyl chloride, more commonly known as PVC, saw prices rise by 5 percent during February due to some lack of availability and raw material costs. PVC producers have proposed raising prices a further 8.8 percent in March, citing a recent series of outages at production plants in Louisiana and Texas. PVC is used in the construction industry to make pipes, and is also used in the manufacture of linoleum, among many other consumer products. Prices for polyethylene, another key plastic used in the manufacture of consumer goods, such as plastic bottles and trash bags, were also higher. Rising costs earlier in the year for ethylene, the key chemical use to make polyethylene, are behind the firmer price for the plastic. U.S. polyethylene prices rose 5.7 percent during the first quarter of 2013.

PetroChem said ethylene itself saw its prices jump by nearly 30 percent between early December and late January, threatening the profitability of certain plastics' manufacture. Ethylene's spike found a plateau during the first quarter, however, with pricing increasing 3 percent as polyethylene margins recovered somewhat. Polyethylene is used in the manufacture of packaging, consumer goods and industrial products that it is considered by many to be as ubiquitous as fuel. Unlike ethylene-based polyethylene and PVC, prices for two other consumed polymers -- polypropylene and polystyrene -- saw declines and show signs of continuedweakening. Polypropylene prices have dropped 3.5 percent during February alone. Supplies of this plastic resin are said to be abundant, and so buyers have shown caution about building inventory in a falling market. As a result, order cancellations have been reported recently in this market. Polypropylene is used in the automobile industry and also in the carpet industry, as well as in certain components of packaging such as plastic bottle caps. Polystyrene prices have fallen 4.7 percent so far in February, mostly based on declines seen in the upstream benzene market, which has followed crude oil trends. Polystyrene is best known for its packaging uses as "clamshells" for food to-go boxes and also as packing peanuts. It is also used in the manufacture of jewel cases for CDs and DVDs.

The PetroChem Wire is a daily newsletter about US commodity petrochemical markets.

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