In addition, excess products stockpiled by downstream buyers in anticipation of hurricanes that did not materialize added to the oversupply situation. As a result, both spot ethylene and polyethylene prices fell between $0.13 and $0.15 per pound in the fourth quarter of 2006 and were not fully offset by reductions in feedstock costs.
In addition, PVC resin and PVC pipe selling prices and volumes fell dramatically in the fourth quarter due to de-stocking of inventory by PVC converters anticipating lower prices, normal seasonal weakness and continued softness in the construction industry.
The lower sales volumes in the vinyls segment resulted in lower operating rates and higher unabsorbed cost. Conversely, the fourth quarter of 2005 was one of the best in the company's history due in part to the spike in product prices and increased margins that occurred as a result of Hurricanes Katrina and Rita.
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Westlake Chemical Corporation, USA
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