While polyethylene (PE) transactions continue to outnumber polypropylene (PP), improved PP availability made for a better balance. PE contracts will be steady in November and producers instead will pursue their $0.05/lb price increase in December. PP contracts should see an increase between $0.01 and 0.03/lb, depending on producers' ability to expand margins. While inquiries from international traders continue to stream in, the strong US dollar is complicating high-volume export sales through the secondary market.
The spot ethylene market saw reduced activity and pricing held within a small range, write PlasticsExchange analysts. While a few crackers remain offline for maintenance, supply and demand appear to be fairly balanced. Ethylene for November delivery changed hands flat at $0.235/lb and spent much of the week with light selling interest and few buyers.
|Image courtesy Cool Design/freedigitalphotos.net.|
The spot PE market was very busy. While the flow of offers was somewhat reduced, a high percentage of trading opportunities were completed and prices rose $0.005/lb across the board. Transactions were concentrated in the LDPE and LLDPE film grades and, to a lesser extent, HDPE blowmolding. Crude prices are within shouting distance of $40/bbl, prompting traders to seek back-to-back transactions rather than looking to procure speculative material. PE contracts have been down a net $0.13/lb during 2015; producers will try to pare losses by implementing the delayed $0.05/lb increase in December, according to the PlasticsExchange.
The Propylene market saw very little action; bids and offers did not deviate far from the $0.29/lb level where spot PGP last transacted in the previous week.
PP trading was much better and prices edged a half-cent higher; while supplies are still spotty, liquidity has improved. November PP contracts will rise at least by the penny increase seen for November PGP contracts, plus any additional production margin that can be garnered. Although spot and contract prices have been converging, there are no truly great deals to be had. Aside from typical small buyers, processors are mostly coming to the spot market to fill in gaps due to insufficient direct supply or delayed railcars. PP exports are primarily limited to the natural Mexican market as well as rough wide-spec shipping to the India and Asian regions, reports the PlasticsExchange.
Read the full Market Update on the PlasticsExchange website.
For the long view on resin pricing, read Clare Goldsberry's coverage of the Global Plastics Summit: "PE, PP capacity coming on strong."