Not So Fast

Commodity resin prices are moving up gradually, if not as fast as suppliers wish. Low domestic demand and soft monomer prices restrain hikes, but revived exports and tight monomer supplies could change the picture.

 

PE PRICES STILL FLAT

Polyethylene prices remained unchanged through April and into early May. Suppliers rescinded their 5¢/lb March hikes but then called for a 3¢ increase for May 1, and at least one added 2¢ more for June 1. However, the London Metal Exchange (LME) North American short-term futures contract in blown-film butene LLDPE pointed in the opposite direction—37¢/lb for June, down from 38¢ for May.

Contributing factors: Polyethylene supply is said to be tight, owing to suppliers restraining production and an uptick in exports. “Suppliers did not increase production to meet that export demand,” says senior editor Mark Quinner at PetroChem Wire in Houston. According to Mike Burns, global business director for PE at Resin Technology Inc. (RTI), Fort Worth, Texas, resin capacity utilization rates have been under 70%. He also notes that while the export market rose 25% in March, PE resin inventories continued to grow. “This is an indication of how very poor domestic demand still is.” LyondellBasell plans to close another 480 million lb of HDPE capacity at Alvin, Texas, by July 31.

In the first week of May, ethylene monomer spot prices dropped to 21¢/lb from a high of 25¢ in mid-April. Contract prices in March and April fell a total of 1.5¢/lb. However, ethane prices have been going up, while ethylene prices have been dropping. “As ethylene suppliers approach zero profit margins, you can expect them to significantly reduce production. This will tighten the market and ethylene prices may start increasing,” says Burns.

 

PP PRICES MAY RISE

Polypropylene prices remained flat through April. The 2¢ to 3¢/lb price hikes for that month failed, but suppliers tried again with 3¢ increases for May 1. LME’s North American short-term futures contract in g-p injection-grade homopolymer for June was 37¢/lb, almost unchanged from May’s 37.2¢.

Contributing factors: “We are seeing something we haven’t seen for the last couple of years—relative price stability as opposed to big swings in price movement,” says Scott Newell, director of client services for PP at RTI. Export demand awakened in March and continued into April, allowing suppliers to get rid of excess resin. According to Newell, suppliers’ inventories are low and the market has tightened, although he says no one has difficulty getting resin when they need it. Domestic demand remains very poor. First quarter demand was off by 15% from last year.

Meanwhile, propylene monomer supplies are tight as refineries and steam crackers have been running at low rates. Low monomer supply was felt even more by early May, when contract prices were expected to settle 2.5¢/lb higher. Newell says tight monomer supply could continue into June and advises resin buyers to expect price increases. He predicts that suppliers will be able to get at least 2¢ of their newest 3¢ hike.

PVC HIKE FOR JUNE
PVC resin producers in mid-May all announced a 3¢/lb increase for June 1, except Westlake. Demand is still very weak. Ethylene feedstock prices are steady. So the market expects an increase of only 2¢ in May and 1¢ to 2¢ in June.

 

PS HIKE TRIMMED

Polystyrene producers pushed for a 4¢/lb hike in May, but they are expected to fall back to about 2¢. Resin makers’ announcement of a further 3¢ increase June 1 was greeted with some skepticism. Meanwhile, EPS producers are supporting 5¢/lb increases for May and 5¢ more for June.

Contributing factors: PS price increases were based on an expected surge in benzene tabs in April, which didn’t happen. Instead benzene was flat at $1.69/gal and settled for May at $1.90. That justifies only a 2¢ increase in PS. Depending on where benzene goes next, the June increase could disappear too. Imports of lower priced EPS beads from Asia have tapered off, making EPS hikes likelier.

 

PET PRICES GOING UP

Bottle-grade PET resin prices are expected to rise at least 5¢ this month. PET suppliers issued May 1 increases of 4¢ and quickly amended them to 6¢/lb.

Contributing factors: A rapid increase in the price of paraxylene feedstock caused PET suppliers to adjust their May increases higher. Paraxylene prices moved from 44¢/lb in April to 49.5¢ in May, and June price nominations were at for 51.5¢/lb. According to one major PET supplier, this upswing stems from increased PET resin and fiber demand in Asia, low production of paraxylene because of the economic slump, and the recent rise in crude oil prices, which are up $8/barrel.

This supplier expects the new PET resin price increase to be mostly successful: “Major PET bottle converters have already announced to their customers price increases of 5¢/lb for June 1. I expect that PET resin suppliers will at least get 5¢ of their 6¢/lb increases.” This source also notes that this is the first year in quite some time when there is no apparent buildup of bottle resin inventory. “There was a colder, wetter spring. The economy is slow. And no one wants to build inventory while prices of raw materials are high and there are indications that they may soon drop.”

Meanwhile, 800 to 900 million lb of new capacity from Indorama Polymers at its AlphaPet venture in Decatur, Ala., is expected to start up in June. This will start affecting the market in July.

 

OTHER HIKES LACK SUPPORT

Attempted increases in engineering resins and thermosets remain in question because of lack of industry support. Dow announced a 7¢/lb hike for PC in May, despite the fact that PC demand is weak globally. “The world is awash in PC,” says to Paul Blanchard at CMAI in Houston. Dow justified the hike on the basis of feedstock price increases.

In nylon, Honeywell Resins and Chemicals announced a 10¢/lb increase in nylon 6 resins for May 11, but no other supplier had followed suit by mid-May.

Likewise, AOC said it would hike tabs on unsaturated polyester resins and gel coats by 5¢ on June 1. Other suppliers said they were not going along. 

 

Market Prices Effective Mid-May A
RESIN GRADEb	¢/LB	¢/CU INc

ABS           MED IMPACT    90 - 110      340 - 412       HI IMPACT    95 - 130      359 - 491       X-HI IMPACT    110 - 150      415 - 567       HI HEAT    90 - 125      340 - 472       PIPE    85 - 95      321 - 359       SHEET    90 - 105      340 - 397       TRANSPARENT    134 - 205      506 - 774       FITTINGS    94 - 115      355 - 434       PLATING    165      623       FLAME RET    120 - 140      453 - 529       STRUCT FM    92 - 102      347 - 385       10% GLASS    134 - 145      506 - 548       30% GLASS    129 - 141      487       ABS/PC ALLOY    154 - 185      532 - 699       ABS/PVC ALLOY    139 - 144      525 - 544       ABS/NYLON ALLOY    199 - 355      752 - 1341       ACETAL           HOMOPOL    151 - 172      7.7 - 8.7       20% GLASS    171 - 235      8.7 - 11.9       COPOLYMER    144 - 160      7.3 - 8.1       25% GLASS    171 - 245      8.7 - 12.4       ACRYLIC           G-P    117      5.0       IMPACT    192      8.2       ACRYLONITRILE COPOL           EXTRUSION    101 - 116      4.0 - 4.6       INJECTION    120 - 135      4.8 - 5.4       ALKYD  65 - 74    4.9 - 5.5       CELLULOSICS           ACETATE    187      8.6       CAB    189      8.2       CAP    189      8.2       DAP (G-P)  251 - 497    16.7 - 34.7       EPOXY           G-P RESIN    116 - 126      NAd       COMPOUNDS               C/B/Te    123 - 166      9.4 - 12.9       R/C/Df    208 - 271      15.3 - 20.1       SEMICONDUCTOR               NOVOLAC    193 - 228      13.1 - 15.9       ANHYDRIDE    188 - 268      13.9 - 19.2       EVA           INJECTION    69 - 71      2.3 - 2.4       FILM EXTRU    67 - 69      2.3       EVOH  330    15       FLUORO-POLYMER           CTFE    5000 - 6000      385 - 462       ECTFE    1200 - 1680      90.7 - 120       ETFE    1205 - 1730      80.7 - 115.8       FEP    971 - 1470      74.8 - 113.2       PFA    1550 - 2520      120 - 195       PTFE    500 - 950      33.5 - 63.6       PVDF    750 - 1200      48 - 76.9       IONOMER           PACKAGING    127 - 166      4.3 - 6.0       INDUSTRIAL    150 - 244      5.0 - 8.3       LIQUID-CRYSTAL POLYMERS           INJECTION MIN FILLED    690 - 1035      44.2 - 72.1       GLASS FILLED    695 - 895      40 - 52       CARBON FILLED    1700 - 2000      83.2 - 138.6       UNFILLED    1000 - 1200      58 - 70       EXTRUSION UNFILLED    1200 - 2200      60.5 - 110.9       MELAMINE COMPOUND  90 - 94    5.5 - 5.6       MELAMINE/PHENOLIC COMPOUND  75 - 83    4.5 - 5.0       NYLON           TYPE 6    139 - 159      5.7 - 6.5       MIN FILLED    131 - 144      5.4 - 5.9       30% GLASS    148 - 173      6.0 - 7.0       TYPE 66    153 - 168      6.3 - 6.9       MIN FILLED    151 - 159      6.2 - 6.5       30% GLASS    142 - 192      5.8 - 7.9       TYPE 69    250 - 276      9.7 - 10.7       TYPE 6/10    286 - 313      12.4 - 13.6       TYPE 612    400      15.3       30% GLASS    309 - 311      14.7       40% GLASS    309      14.7       TYPE 46    295      12.6       TYPE 11    650 - 750      24.3 - 28       30% GLASS    NAd - NAd      NAd - NAd       40% GLASS    NAd - NAd      NAd - NAd       TYPE 12    318 - 341      12.1 - 13.0       30% GLASS    327 - 350      14.7 - 15.8       50% GLASS    299 - 340      15.6 - 17.8       TRANSPARENT AMORPHOUS    247 - 360      10.3 - 15.0       PHENOLIC MOLD COMP  75    3.8       REINFORCED GRADES    105 - 268      6.1 - 16       POLYAMIDE-IMIDEg           UNFILLED    2750      148.5       30% GLASS    2500      135       30% CARBON FIB.    3500      185       POLYARYLATE  200 - 280    8.8 - 12.3       POLYARYL SULFONE  440    21.8       POLYBUTYLENE           G-P    94 - 96      3.1       FILM    88 - 91      2.9       PIPE               COLD WATER    116 - 120      3.9 - 4.0       HOT WATER    162 - 166      5.5 - 5.6       POLYCARBONATE           INJECTION    158 - 173      7.9       20% GLASS    164 - 181      8.2       30% GLASS    165 - 207      9.3       EXTRUSION    133 - 171      7.7       BLOW MOLD    138 - 176      7.5       STRUCT FOAM    137 - 172      7.8       20% GLASS    219 - 243      11.0       FR    153 - 188      8.5       CD    124 - 186      8.4       POLYESTER (TP) PBT TYPE           UNFILLED    145 - 150      6.8 - 7.3       HI-IMP    165 - 175      7.8 - 8.3       30% GLASS, FR    195 - 215      9.2 - 10.1       STRUCT FOAM    159 - 165      NAd       PET           BOTTLE (RAILCAR)    73 - 77      3.7 - 3.8       MOD PET               30% GLASS    132 - 143      7.4       55% GLASS    148 - 155      9.8       30% GLASS FLAME RET    147 - 157      9.2       PETG COPOL    114 - 124      5.2 - 5.6       POLYESTER THERMOSET           G-P ORTHO    151 - 162      NAd       ISOPHTHALIC    175 - 196      NAd       BIS-A    210 - 235      NAd       PEEK  4400    231       30% GLASS    3300      173       POLYETHERIMIDE  641 - 646    29.3 - 29.5       30% GLASS    526 - 531      24.0 - 24.2       POLYETHERKETONE (PEK)  2950    130.1       30% GLASS    2600      153       POLYETHERSULFONE  350 - 400    17.2 - 19.7       30% GLASS    425 - 525      21 - 25.9       POLYETHYLENE (RAILCAR) LDPE           G-P MOLDING & EXTRU    50 - 52      1.7       INJECTION    52 - 54      1.7 - 1.8       LID RESIN    55 - 57      1.8 - 1.9       LINER    52 - 54      1.7 - 1.8       CLARITY    48 - 50      1.6 - 1.7       EXTRU COATG    53 - 55      1.8       BLOW MOLD    55 - 57      1.8 - 1.9       LLDPE, BUTENE BASED           G-P MOLDING    55 - 57      1.8 - 1.9       LME 30-DAYj    38     1.4      FILM    52 - 54      1.7 - 1.8       ROTOMOLD    49 - 51      1.6 - 1.7       LLDPE, HAO-BASED           G-P MOLDING    50 - 52      1.7       LID RESIN    60 - 62      1.9       LINER FILM    53 - 55      1.8       HDPE           G-P INJ MOLD    50 - 52      1.7       FILM    57 - 59      1.9       BLOW MOLD    58 - 60      1.9 - 2.0       HMW-HDPE           BLOW MOLDING    54 - 56      1.8       FILM    55 - 57      1.9       PIPE    62 - 64      2.0 - 2.1       UHMW-PE  1.22 - 1.52    4.1 - 5.1       PPE/PPO BASED RESIN           INJECTION    180      6.8       20% GLASSh    283      12.3       30% GLASSh    291      13.3       EXTRUSIONh    242      9.2       STRUCT FM    231      NAd       PPS           40% GLASS    450 - 520      27.0 - 31.2       55% GLASS/MINERAL    345 - 420      22.7 - 27.7       65% GLASS/MINERAL    270 - 315      18.9 - 22.1       POLYPROPYLENE (RAILCAR)           G-P HOMOPOL INJECTION    46 - 48      1.5 - 1.6       LME 30-DAYj    37     1.2      EXTRUSION FIBER    44 - 46      1.4 - 1.5       PROFILES    52 - 54      1.7       RANDOM COPOL               BLOW MOLDING    50 - 52      1.6 - 1.7       FILM    50 - 52      1.6 - 1.7       INJECTION    49 - 51      1.6       IMPACT COPOL               MED IMP    60 - 62      1.9 - 2.0       HI IMP    62 - 64      2.0 - 2.1       POLYSTYRENE (RAILCAR)           G-P CRYSTAL    58 - 64      2.2 - 2.4       HI HEAT    61 - 66      2.3 - 2.5       HIPS    67 - 73      2.5 - 2.7       SUPER HI IMP    74 - 84      2.8 - 3.1       FR    77 - 82      2.9 - 3.1       STRUCT FM (FR)    66 - 68      2.5       EPS           UNMODIFIED    85 - 88      NAd       MODIFIED    86 - 90      NAd       POLYSULFONE  650 - 750    29 - 33       10% GLASS 430 20.6    799 - 875      36 - 39       30% GLASS 372 20.01    699 - 775      31 - 35       POLYURETHANE (TP)           ESTER TYPE    185 - 255      8 - 11       ETHER TYPE    245 - 295      10.6 - 13       PU ISOCYANATES           POLYMERIC MDI    125 - 145      NAd       80/20 TDI    135 - 145      NAd       PVC RESIN (RAILCAR)           G-P HOMOPOL    48 - 50      NAd       PIPE    47      NAd       FILM    53      NAd       COPOLYMER FLOORING    71 - 74      NAd       DISPERSION HOMOPOLY    81 - 87      NAd       COPOLYMER    86 - 90      NAd       CPVC PIPE COMPOUND    119      NAd       PVDC           EXTRUDABLE    162      NAd       SILICONES           MOLD. COMP.    581 - 640      38.1 - 39.3       SPECIALTY GR.    891 - 3148      NAd       SILICONE/EPOXY    339 - 343      22.5 - 22.8       STYRENEACRYLIC  108 - 112    3.7 - 4.0       SAN (G-P)  80 - 88    3.0 - 3.3       STYRENE MALEIC ANHYDRIDE           G-P    110 - 115      4.2 - 4.3       HI IMP    130 - 140      4.2 - 4.5       FR    175 - 183      6.7 - 7.0       TP ELASTOMERS           OLEFINIC    70 - 76      2.4       POLYAMIDE    300 - 350      10.9 - 12.7       POLYESTER    200 - 310      8.8 - 13.6       STYRENIC    82 - 237      2.9 - 8.3       UREA MOLDING COMPOUND           BLACK & BROWN               WHITE & IVORY               VINYL ESTER           COR RES    221 - 245      NAd       HEAT & COR RES    246 - 258      NAd

KEY: Colored areas indicate pricing activity. An arrow () indicates direction of price change. aTruckload, unless otherwise specified. bUnfilled, natural color, unless otherwise specified. cBased on typical or average density. dNot applicable. eNovolac and anhydride grades for coils, bushings, transformers. fNovolac and anhydride grades for resisitors, capacitors, diodes. gIn quantities of 20,000 lb. h19,800-lb load. jLME 30-day futures contract for lots of 54,564 lb..