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Prices Drop for PP, Largely Flat for PE, PS, PVC, and PET

While the major correction in PP prices was finally underway, generally stable pricing was anticipated for the other four commodity resins.

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Prices of PP drop, flat for PE, PS, PVC and PET
Source: Baerlocher USA

Barring any major production or logistical disruptions, prices of PE, PS and PVC were largely expected to be stable through the second quarter, with those of PET likely to move up a bit this month driven by raw material formulation cost increases. The key outlier was PP with the months’ long anticipated major price correction taking place in the April-May time frame. Demand has been characterized as slowed across the board for all five commodity resins, though an upward trend was anticipated. This is largely due to prebuying for restocking primarily due to the upcoming hurricane season.

These are the views of purchasing consultants from Resin Technology Inc. (RTi), senior analysts from Houston-based PetroChemWire (PCW), CEO Michael Greenberg of The Plastics Exchange, Scott Newell, executive v.p.  polyolefins at distributor/compounder Spartan Polymers, Mike Burns of Plastic Resin Market Advisors, and resin pricing expert Robin Chesshier.

 

 

PE Prices Flat

Polyethylene prices in April were another rollover and this trend had a good likelihood of continuing into the May-June time frame, according to PCW’s associate director for PE, PP and PS David Barry, The Plastics Exchange Greenberg, Mike Burns of Plastic Resin Market Advisors and resin pricing expert Robin Chesshier. Meanwhile, suppliers reiterated their 3¢/lb increase initiatives and issued a May prices hike of 3¢/lb. Chesshier noted that demand for domestic products was down while ‘cheap’ imports continued to arrive and supplier inventories grew, and expected a relatively stable market for PE, barring a major production or supply event.  

Burns saw the market as favoring processors and converters, venturing that discounted offers from suppliers and additional sufficient availability in the secondary market is expected to apply downward price pressure on the January 5¢/lb price hike. While PCW’s Barry also did not see potential for another increase and saw prices as remaining relatively stable, he did not anticipate the same scenario for the second half of this year as that of 2023. “We saw a big drop in prices in last year’s second half but there are some different factors at play, including increased prices in crude oil. Also, suppliers’ inventories are more balanced, with exports now accounting for nearly 50% of sales,” he noted.  

Reporting on spot market trading, The Plastics Exchange’s Greenberg reported that processors appeared to be amply supplied. “We have been seeing fairly normal order flow, as opposed to the type of activity that signifies either inventory building or destocking.”

 

PP Prices Drop

Polypropylene prices were poised to fall by double digits in April, in step with propylene monomer, while some further decrease was also projected for May, with this month likely to level off, according to PCW’s Barry, Spartan Polymers’ Newell and The Plastic Exchange’s Greenberg. While suppliers were seeking to implement a margin improvement increase of 2¢/lb in April, these sources saw the outcome as unlikely.  

Spartan Polymers’ Newell ventured the months’ long anticipated major correction of PP prices, put off primarily due to planned and unplanned monomer shutdowns, could add up to about 15¢/lb. He noted that between August 2023 and March 2024, PP prices moved up 23¢/lb. Noting that spot prices were flat-to-lower, PCW’s Barry ventured that suppliers reportedly had “ample line time available,” indicating that contract buyers had postponed buying in April.

Demand was expected to be stronger in May, as processors anticipated lower prices. These sources described demand in nearly all sectors as slowed, with orders not materializing as was expected going into second quarter. Still, they anticipated that prebuying in May-June would bolster demand as processors looked to stock up, particularly due to the potential of a very active hurricane season.

The Plastics Exchange’s Greenberg confirmed his company saw active trading as April was ending, reporting that spot market supply began to open up at lower prices, enabling more transactions. “It required slim margins to complete a number of the deals, but sellers were willing to unload material, some at losses, as lower cost replacement material began making its way into the market.”

PS Prices Flat

Polystyrene prices appeared to be settling flat in April, were likely to follow suit in May and possibly this month, according to PCW’s Barry and resin pricing expert Robin Chesshier. This, after moving up a total of 10¢/lb in first quarter, driven primarily by benzene prices. Chesshier ventured that based on market fundamentals and barring any major supply disruption, the PS market prices could remain stable through much of second quarter. Demand was a bit better, but not compared to typical seasonal demand of past years, she noted.

PCW’s Barry reported the implied styrene price based on a spot formula (30% ethylene, 70% benzene) varied by less than 1¢/lb through a six-week period leading to the last week of April. He characterized PS demand as lackluster with no supply issues reported despite some temporary unplanned styrene monomer plant issues.

PVC Prices Up, Then Flat

PVC prices moved up 1¢/lb in April, following the March 3¢/lb and February 2¢/lb hikes, back-to-back increases that have not taken place for a few years in this market, according to Paul Pavlov, RTi’s v.p. of PP and PVC and PCW’s associate director PVC and pipe Donna Todd. Pavlov projected relatively flat pricing for the May-June time frame.

Driven primarily by increased demand for infrastructure projects, demand for PVC was up between 5% and 7% over 2023, Pavlov noted.  Commenting on the increases, Todd noted that with the April increase, suppliers would have achieved only 6¢/lb out of the 9¢/lb they had sought so far this year. “Generally speaking, May has been viewed as the last month in which a springtime price increase could be announced, as pricing normally flattens out for the summer barring a hurricane that takes down production facilities.”

PET Prices Flat, Then Up?

PET prices in April appear to be settling flat to slightly up after moving up 4¢/lb-to-5¢/lb in first quarter, all based on raw material formulation costs, according to Kevin Mekaru, RTi’s senior business unit leader, commodity plastics. While he thought PET prices would be a rollover in May, he ventured that an increase could emerge for early June, due to a combination of anticipated prebuying by suppliers as processors built up inventories for the summer season and prices of key raw material paraxylene moving up as the gasoline season kicks in and its availability for PET production becomes tighter. Meanwhile, attractively priced imports continue to be an issue for domestic suppliers.

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