TPE resin pricing Dec. 29-Jan. 2: December contracts finish down, but January increases proposed for PE, PP

January 12, 2009

In the polyethylene (PE) contract market, December contracts settled at a $0.10/lb decrease from November, according to spot-trading platform, The Plastics Exchange (TPE) and its reporting partner, The PetroChem Wire, but producers are already seeking to regain a pricing foothold, announcing their intentions to raise January PE prices by $0.07/lb. TPE notes that a recent upswing in upstream ethylene prices and producer inventory discipline could support a price increase. In December, the spot market firmed, leading some to believe the gap between spot and contract pricing could shrink in January. Spot prices to end 2008 and start 2009 were largely unchanged, remaining in the high $0.30s/lb for most grades. Low-density film grade remained at a premium, selling in the low $0.40s/lb.

Polypropylene (PP) December contracts finalized with a $0.10/lb decrease, with some reports of only a $0.07-$0.08/lb drop. Here too, producers will seek an increase, targeting $0.05-$0.06/lb, although TPE notes that processors are dubious of the increase’s chances for success. Spot pricing was steady, with generic-prime railcars of homopolymer grade PP staying in the low-to-mid $0.30s/lb. Copolymer PP maintained a $0.02/lb premium to homopolymer, trading in the mid $0.30s/lb. Of note, TPE reports that excess inventory has been shed from the market, and buyers needing resin are having to pay current offer prices in January.

Polystyrene (PS) held steady as well, with high-impact grades offered in the mid-to-high $0.60s/lb, and general purpose reported in the high $0.50s/lb. On TPE’s spot-trading floor, about 800,000 lb of general-purpose and 500,000 lb of high-impact PS were offered each day.[email protected]

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