The commodity resin markets continued to see heightened activity during the week of June 16-20, but as for spot pricing - well, The Plastics Exchange reported another uneventful week and so, "steady as she goes." June polyethylene contracts are rolling flat once again, while polypropylene contracts are declining $.03/lb this month. Higher world oil prices have encouraged international resin traders to again look to North America for well-priced supply. While the firm is seeing improved demand from Latin American locales, high asking prices out of Houston still disengage most large volume spot sales to other regions.

The energy markets moved in opposite directions and August rolled to the front month futures contract. Crude Oil volatility was reduced, the August contract traded in a very narrow range of $1.82/bbl and ended the week at $106.83, up just $.66/bbl. Natural Gas shot higher early in the week, nearly reaching $4.90/mmBtu, but then proceeded to fall from there. The August futures contract finally settled Friday at $4.552/mmBtu, for a large net loss of $.205/mmBtu. Ethane shed about a cent to end the week around $.285/gal ($.12/lb). Propane prices jumped a nickel to last trade near $1.085/gal ($.3075/lb). The Crude Oil : Natural Gas ratio expanded back out to 23.5:1.

Spot ethylene continued to change hands at an above average pace and prices rose; the market began with a small pop and picked up steam as the days wore on. By mid-week, ethylene for June delivery transacted at $.565/lb up 2-cents and most recently traded just shy of $.58/lb, a total gain of more than $.03/lb. The premium for ethylene in Louisiana jumped out to $.10/lb. The forward market was active too and the 2014 curve steepened, with prompt prices commanding a $.025/lb premium to Dec. The backend of the 2015 curve saw strength making the total discount through Dec 2015 only around a nickel. Several crackers remain offline for scheduled maintenance.

Spot polyethylene trading volumes remained healthy and prices held firm. The Plastics Exchange is seeing improved supplies coming for LDPE and LLDPE film grades, but still limited availability for prompt packaged delivery; most new offers are for railcars still to ship. Processors have been eager to procure material, especially those with delayed rail shipments. The firm is also seeing cases where buyers pulled down their inventories too thin hoping for a price decrease, but with June contracts poised to roll flat again, they are finding the need to tap the spot market for supply. HDPE availability is still ample; LDPE and LLDPE injection grades are not abundant, but can generally be found.

The propylene market was barely tested, with nary an outright transaction seen. Still, slight pressure remained on spot PGP with offers mostly hanging around the last transaction price of $.64/lb. By Friday, sellers were willing to let PGP for June delivery go at $.635/lb, marking the market down a half-cent for the week. The forward curve is only slightly backwardated with less than a cent separating higher prompt prices from those over the balance of this year. Spot RGP continued to price around a dime below PGP.

Spot polypropylene activity was again limited, with a relative lack of interest seen from both buyers and sellers. Processors are enjoying June's $.03/lb price contract decrease and eyeing another small decline in July. However, while some resellers still have plenty of inventory on hand, certain grades are starting to disappear and curiously few fresh railcars are now seen offered. While there could still be a little push by suppliers to move material into quarter-end, cheap spot PP resin is getting harder to find. Although another penny or two could come out of contracts in July, the spot market is starting to signal that we could be at or near the bottom of this cycle.

Final thought from The Plastics Exchange CEO Michael Greenberg:

Spot resin trading was again active for polyethylene, while polypropylene - eh, not so much. PE producers are shrugging off any calls for a decrease and will again hold contracts flat in June. PP contracts declined $.03/lb this month and should follow weak spot monomer costs down a tad in July; however, the spot resin market is a bit more balanced and could even start to edge a little higher. This next week could get interesting as market participants jockey their quarter-end inventories, then it then it could be a whole new ball game come July. Hmm, do I sense a slightly bullish tone starting to emerge?