Prices of PE, PP, PVC, PET Largely Firm, Flat for PS

A combination of improved and/or steady demand, overall lower production rates (with the exception of PE), higher feedstock costs in some cases, along with concerns of an active hurricane season, resulted in some implemented and pending price increases for the five major commodity resins. While further price increases were unlikely, by most accounts, it appeared that resin prices in the third quarter could sail through as largely firm, barring major production disruptions.

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 vice president  polyolefins at distributor/compounder Spartan Polymers, and Mike Burns of Plastic Resin Market Advisors.

PE Prices Flat for Now

Polyethylene prices rolled over in May, following a 3¢/lb price increase that appears to have been largely implemented. Meanwhile, suppliers were out with a 3¢/lb hike for June, as well as a 5¢/lb increase for July, according to PCW’s associate director for PE, PP and PS David Barry, Greenberg and Burns. Barry ventures there was a 50/50 chance for the June price hike to be implemented, but expected stable pricing in the July-August time frame. He notes that fundamentals would not support such an increase. Also, that most of the new PE capacity that has come on stream is going to exports, now accounting for nearly 45% of capacity. 

These sources cited year-to-date (through May) domestic demand as up 4% and exports demand at up to a whopping 20%. ACC data showed capacity utilization percentages for North American PE suppliers in the upper 80s across all grades, with LLDPE at the highest range. Burns notes that steady demand, absent any production disruptions, would continue with relatively stable prices. He ventures that prestocking demand ahead of the hurricane season could draw down fall inventories, delaying near-term industry index reported price decreases, with year-to-date index increases through May, up 8¢/lb.

Greenberg saw PE prices remaining pretty stable. He notes that ACC data showed domestic PE sales in May were up by 7% above the 12-month average, yet with still a sizable upstream inventory build — the highest since July 2022. “So where is all of the resin? It seems large volumes are targeted for export, but have just not yet shipped, while producers are also building an inventory buffer as the hurricane season gets underway,” Greenberg reports.

Barry notes that PE spot prices were flat to higher amid balanced supply and mixed reports on demand. “Suppliers were seeing a pickup in infrastructure-related applications, driven at least partly by the release of federal stimulus funds through state projects. Demand from consumer-driven applications such as stretch films was lagging, however.”

PP Prices Up

Polypropylene prices in June moved up by 2¢/lb after dropping 2¢/lb in May, in step with propylene monomer, according to Barry, Newell and Greenberg.

The upward move after April’s long-awaited major downward 10¢/lb  price adjustment was driven by a combination of scheduled shutdowns and unscheduled outages of PDH (Propane Dehydrogenation — or, on-purpose propylene) plants, which has tightened the feedstock’s supply and created price volatility. Barry ventures that July prices would be flat-to-higher, with this month’s closer to flat, depending on monomer supply. 

Newell ventures that July PP prices had a chance to roll over, while this month totally depended on the supply and pricing of propylene monomer versus demand. He and Barry note that PP demand through May was up 3% compared to 2023, but also that PP production rates averaged only in the mid-70s percentile during this period. Still, supplier inventories had dropped to 38.8 days of supply, and while buyers of prime PP grades did not have a problem getting any material, the secondary market was tighter, Newell says.

While demand for some PP markets (including BOPP and packaging), in general, was looking good, he was cautious as to whether the market could hold up in this upward trend through third quarter, based on overall market concerns. Some of the strength shown could be a result of restocking and also prebuying as prices dropped and there were active hurricane season warnings. 

Greenberg reports that the PP spot market was very active as buyers sought spot material priced lower than contracts, which were poised to rise in June due to higher monomer costs. The cost-push increase is currently tracking around 3¢/lb and could expand if monomer issues continue, and he reports, “We also felt that PGP supplies were too snug and could spike higher if a production issue occurred, it seemed a sensible risk/reward given the previous decrease in resin and monomer prices and the hurricane season just starting. Therefore, we’ve been active buyers of PP for our market, making account and foresee additional upside ahead in pricing.” 

PS Prices Flat

Polystyrene prices in June rolled over in the third consecutive month and July appeared to be going the same way, according to Barry and Kevin Mekaru, RTi’s senior business leader commodity plastics. Both note that the price volatility of key feedstocks had subsided, despite some styrene monomer production issues.

Barry, for one, had doubts that that the lower benzene costs, in particular, would be enough to pull down July PS pricing. “Overall supply remained adequate to meet forecast demand. The implied styrene cost based on a spot formula (30% ethylene, 70% benzene) was down 1.2¢/lb for July’s last week at 43.2¢/lb.

PVC Prices Up, Then Flat

PVC prices moved up 2¢/lb in June, adding to the unusual back-to-back increases totaling 6¢/lb through April, according to Paul Pavlov, RTi’s vice president of PP and PVC, and PCW’s Associate Director PVC & pipe Donna Todd. Both attribute the increase to higher ethylene costs and strong PVC export prices. Meanwhile, suppliers were out with increases of 2¢/lb, effective July 1. Pavlov ventured a rollover of prices for both July and August. He notes that relatively good demand would continue, with domestic suppliers at an advantage in terms of exports as global PVC prices have been rising. 

Todd reports that increasing freight rates from Asia to the Americas enabled domestic suppliers and traders to raise their export prices in June, which Pavlov notes was about 5¢/lb. Meanwhile, by June, domestic PVC capacity is lower than had been predicted and the new capacity previously reported to come on stream was delayed, according to Todd. “Formosa’s 300 million lbs/yr expansion at Baton Rouge, Louisiana, was originally expected to be up in fourth quarter 2020, but was repeatedly delayed and is now supposed to start by August 1. Shintech’s new 830 million lbs/yr plant at Plaquemine, Louisiana, was originally slated to start up by the end of 2023. Shintech’s latest update was that it would start by mid-2024, but market watchers don’t expect it to come online until 4Q of this year.”

PET Prices Up

PET prices were flat in June, following a 1¢/lb-to-1.5¢/lb drop in May, but prices were likely to move up 1¢/lb-to-2¢/lb in July and possibly this month, in accordance with raw material formulation costs, according to RTi’s Mekaru.  Driving the potential of upward pricing was driven by a force majeure of key feedstock PTA by Alpec at its Mexico site due to a drought that has affected the Altamira petrochemicals hub in Mexico’s state of Tamaulipas. Alpec has a production capacity of over 2.2 billion lb/yr in two plants in the region. 
Mekaru says there is definitely a concern within the domestic PTA and PET markets that supply disruptions will result if the crisis in Altamira continues. He characterizes supply as ample, with competitively priced imports continuing to be a factor and year-to-year demand with a bit of an uptick.