Robust demand and high energy costs have seen polyvinyl chloride prices rise for three consecutive years, culminating in a 20% increase between August 2005 and 2006, reports the U.S. Bureau of Labor Statistics Producer Price Index. Hurricane Katrina last year helped spike prices. Spot shortages followed because PVC and other vinyl products use ethylene resins produced from oil via naphtha or natural gas via ethane.

Hurricane-related shutdowns sent resin prices soaring to 72¢ per lb as standing inventories were quickly absorbed, says Frantz R. Price, of Global Insight Inc., a Waltham, Mass.-based research firm. Prices have since flattened to about 65¢ per lb during the last six months due to a housing market slowdown and softening economy, Price adds.