Plastic Packaging Makers Rise On Cheap Feedstock

MIKE OBEL

NEW YORK (AP) — Shares of plastic packaging makers rose Tuesday as several factors combined to lower the price of natural gas — a key feedstock in the manufacture of plastic products — and create conditions for it to remain low.

On the New York Mercantile Exchange, or Nymex, the price of natural gas fell 6.7 cents to $2.856 per 1,000 cubic feet.

"Because of poor industrial demand in North America and concerns about oversupply, natural gas prices have continued their downward spiral," said S&P credit analyst Thomas Watters, noting that since the end of January until Aug. 14, the Nymex natural gas price has fallen 33 percent.

Watters also said the price of natural gas is not being supported by the price of the other main petroleum commodity, crude oil, which has been rising on "a more optimistic outlook for the global demand of transportation fuels."

Besides the weak industrial demand and the divergence between the prices for natural gas and crude oil, growing supply of natural gas are contributing to the commodity's weak price, said Gene Shiels, assistant director of investor relations at Baker Hughes Inc., which monitors the natural gas and crude oil industries.