The Plastics Exchange Week in Review 5656

While volume was strong, prices were lower for polyethylene (PE) last week, according to the resin-trading platform, The Plastics Exchange (TPE; Chicago, for more information, including detailed, historical pricing charts, go to www.theplasticsexchange.com). Producers will postpone a planned April price increase of $0.04-$0.07/lb until May, since the generic prime market had only shown a $0.015/lb price gain during the first week of April as exporters and resellers filled a supply gap created by producers. Natural gas closed higher at $7.80/mm Btu, up $0.20, but lower than the recent $8.00/mm Btu high. In response, ethylene was higher, up $0.02 to $0.38/lb. TPE speculates that producers could retry tightening supplies and pushing for a $0.04-$0.07/lb May price increase.

In polypropylene (PP) trading, volume was strong with higher prices, according to TPE. Polymer-grade propylene was up $0.04/lb in early April, and on that basis, PP producers are pushing for an April $0.04/lb increase. High operating rates at producers and lower domestic demand, however, have created a prime resin inventory glut.

In polystyrene (PS) trading, volume was better with lower prices, as TPE reports that the market has lost momentum and is giving back some recent price gains. Large quantities of off-prime and prime resin downgraded to generic prime could hamper producer efforts to implement a $0.03/lb price increase in April, after earning a price increase in March. With regards to the announcement by Dow and Chevron to form a PS joint venture, TPE said, “Further consolidation in the [PS] market segment will help remaining producers better manage production to match demand.” Adding that another plant or reactor in North America could be permanently shutdown, improving production margins for the remaining PS businesses.