With the Exception of PP, Commodity Resin Prices Flat-to-Down

Let’s take a look at how commodity resin prices were faring going into the last week of November with input from Houston-based PetroChemWire (PCW;) and Michael Greenberg, CEO of Chicago-based The Plastics Exchange. As is typical at year’s end, activity slows down, despite what other drivers impacting pricing might be up to.Going into December, resin prices are likely to be relatively stable with PP prices bumping up a bit.

PE: Spot prices were flat to lower, yet activity was limited during the shortened Thanksgiving holiday week, according to PCW’s Senior Editor David Barry. He cited the continuation of tight supply of certain grades, such as blow molding and pail grades of HDPE. Also, there was a limited supply of HMW-PE film driven by strong demand for HDPE pipe in both the U.S. and China—as the film grades are produced on the same assets as bimodal pipe resins. However, additional prime bimodal HDPE film output from new plants is expected in December, which could tilt the HMW-PE film supply balance, Barry ventured.

On the PE contract level, there were no new developments. Suppliers have implemented price hikes totaling 10¢/lb since July, supported in part by hurricane-related supply tightness, sums up PCW’s Barry.

The Plastics Exchange’s Greenberg reported that both film and blow molding grades of spot HDPE slid another cent, while injection grades lost 2¢/lb as availability improves. “LLDPE butene shed a penny, but the higher alpha olefins were firm amid snug spot supplies. LDPE for film also held flat, having already been hit hard. The overall PE market continues to move back down towards pre-Harvey levels and could potentially drift lower as new production continues to come online. The export markets have been slow due to Harvey-related price and availability issues, but can quickly get back up to full speed when producers aggressively pursue them. In the meantime, PE producers have some room to restock after a 3-month 700 million lb draw from their collective inventories.”

PP: Spot prices moved little due to the holiday, and availability remained balanced-to-tight, according to PCW’s Barry. In continued tight supply are both impact PP copolymer and clarified PP copolymer—especially higher melts. Barry noted that prior to Hurricane Harvey, spot propylene monomer has been trading in the mid-upper 30¢/lb range. “With PGP prices approximately 10¢/lb higher than three months ago, and the PP market having seen some margin expansion in recent months, there was concern that North American PP prices were too high relative to the international market, which could damage downstream demand for easily imported finished goods such as PP fiber or film.”

On the contract level, PP prices were expected to move in step with the November propylene monomer contract, which has not been settled, according to Barry. Noted Greenberg, “November PP contracts will get a small bump up, and we maintain an upward bias on polypropylene prices.”

Greenberg also noted that the spot market was flat with few spot deals completed. While he conceded that copolymer PP is more difficult to source than homopolymer PP, he noted that demand was far from stellar for either one. “PP is in a very different situation than PE as new production won’t be added for years to come. There are some streams of imported material starting to reach U.S. shores, but the flow in much gentler than what was seen in 2016.”

PS: Spot prices were flat amid limited activity, according to PCW’s Barry. Meanwhile, two suppliers have issued increases of 6¢/lb, effective Dec. 1—this is step with an uptrend in benzene prices in the fourth quarter thus far. “However, December is typically a seasonally weak month, which could pose challenges to implementing a price increase,” said Barry. In the domestic resale market, generic prime prices were unchanged at 82-84¢/lb railcar delivered for GPPS and 88-90 ¢/lb for HIPS.

PVC: The spot market was quiet during the holiday week. On the contract front, October PVC prices settled up 3¢/lb—this out of suppliers’ initial aim to implement a 5¢/lb price hike. A combination of a lesser-than-expected impact from Hurricane Harvey, and ethylene prices that moved up but did not skyrocket, contributed to the partial price hike implementations, according to PCW Senior Editor Donna Todd.

As for the November contract settlement, Todd ventured that pricing would be flat. “There does not appear to be sufficient downward pressure from either contract or spot ethylene pricing to pull down the November PVC price. In addition, a decline in the PVC export price would not normally be enough on its own to result in lower domestic pricing.” (Export prices peaked in early September at $900-920/mt FAS Houston, and dropped by $150/mt last week to $750-780/mt).

PET: Domestic spot PET resin was offered at 69¢/lb delivered bulk truck and railcar, east of the Rockies on Monday, Nov. 27, according to PCW Editor Xavier Cronin. Railcars tied to monthly contracts were 2-4¢/lb lower. Imported PET resin with an IV (intrinsic viscosity) of 78 ml/gram or higher for truckloads of bulk truck was offered at 66¢/lb DDP(delivered duty paid) West Coast and 68-70¢/lb DDP East Coast.