Spot prices have been falling and developed a large discount to contracts. Polypropylene contracts should average down $0.10/lb this month, commensurate with a drop in PGP contracts, according to the PlasticsExchange (Chicago).
Resellers are securing spot truckloads instead of full railcars as customers anticipate cheaper resin ahead. Likewise, processors are opting to work off material on hand. These savvy buyers seem to be positioning for special buying opportunities that often occur toward the end of the year.
While the previous week was dominated by trader-to-trader activity, this past week saw more processors re-join the market to scoop up any remaining resin that was still priced flat to slightly higher than late September values.
Demand remained robust at the start of the month, particularly from the reseller community as sentiment has turned moderately bullish. Processors were also back in the market, unafraid to pay a penny more than in the previous week.