Resin Price Report: Polypropylene Prices Shoot Up

A flurry of demand and month-end deals super-charged commodity resin trading the last week of February, making it the best week at the PlasticsExchange since December. Spot prices continued to ratchet higher, with polyethylene (PE) adding another cent across all grades while polypropylene (PP) prices jumped a huge $0.04/lb, fueled by rapidly rising monomer costs, the resin clearinghouse reported in its Market Update.

Resin supply constrained

Resin availability remained tight, as producers restrained output and sent surplus material into the export market. International resin buyers continued to favor US material over other feedstock sources as costs rise and disruptions at the Suez and Panama canals displace regional supply chains.

It is still uncertain whether PE producers will implement any of their February increases, according to the PlasticsExchange. On the other hand, PP contracts were up by $0.04/lb in line with expectations and commensurate with the increase in February polymer-grade propylene (PGP) contracts. PE buyers approached the market aggressively, completing orders mostly for railcars or multiple truckloads.

Prime resin accounted for the majority of orders last week, but a fair amount of off-grade resin also changed hands. Linear-low-density PE for film was the biggest mover, followed closely by high-density PE for blow molding and injection. Low-density PE sales, again, lagged behind.

Related:An Insider’s Guide to Resin Pricing

Penny rise for commodity PE resins 

Exports continued to soak up PE resin, leaving relatively little for the domestic market, and at elevated prices, to boot. All commodity PE resins rose a penny in the spot market this past week, bringing 2024 gains to between $0.05 and 0.07/lb, depending on grade. Contracts were still being negotiated for February at the time of writing. The likelihood of a five-cent increase has diminished after some producers lowered their February target to a three-cent increase while adding another three-cent increase for March, writes the PlasticsExchange.

Monomer costs push up spot PP prices

PP trading was relatively soft. Prices continued to escalate as a result of higher monomer costs, which have reached their highest level in 11 months. Resin buyers staged some serious resistance to the increases, some with patience having already bought heavily earlier in the month, said the PlasticsExchange.

Spot PP prices up $0.04/lb

Prime spot PP levels ended the week up a hefty $0.04/lb, which was actually on the moderate end given this week’s $0.07/lb jump in spot March PGP prices. Even though producers have throttled back supply and PP availability is scarce, the spot market has been facing some challenges keeping pace with the rise in monomer costs. With this past week’s jump, spot PGP costs are up some $0.16/lb since the beginning of the year, while spot PP prices have only rallied $0.11/lb since January began. PP contacts have followed PGP up $0.07/lb in the January/February time frame, and while March is just beginning, they are poised for another more-sizable increase this month.

Given that two force majeure declarations from Ineos and Braskem are still in place, PP prices are likely to maintain their upward pressure. Producers have nominated a March price initiative of two to three cents per pound beyond the rise in upcoming PGP contracts.

Read the full Market Update on the PlasticsExchange website.