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Resin markets end month with high transactional volumes and sliding prices

The commodity resin markets finished the month with a bang—transactional volumes were high and spot prices for both polyethylene (PE) and polypropylene (PP) slid a cent across the board, reports the PlasticsExchange in its Market Update for the week of Oct. 30. After seeing a reduced flow of material in the previous week, PE availability improved again. Although spot PP railcar offers are still few and far between, Houston availability is growing and pockets of supply are appearing around the country.

The commodity resin markets finished the month with a bang—transactional volumes were high and spot prices for both polyethylene (PE) and polypropylene (PP) slid a cent across the board, reports the PlasticsExchange in its Market Update for the week of Oct. 30. After seeing a reduced flow of material in the previous week, PE availability improved again. Although spot PP railcar offers are still few and far between, Houston availability is growing and pockets of supply are appearing around the country. Traders are a bit leery to take on speculative positions at the moment, especially given persistent packaging delays. In the meantime, heavy volumes of PE are still being exported directly.

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Image courtesy Cool Design/freedigitalphotos.net.
The spot ethylene market saw only moderate activity, with tightly priced transactions and lower volumes than in recent weeks. Lighter production and tighter supplies lifted ethylene prices from an early October low of $0.1825/lb, a price not seen since December 2008. Ethylene's forward curve continued to flatten, and the March 2016 peak is only about $0.02/lb above the current prompt price, writes the PlasticsExchange.

PE trading was active as the month drew to a close and spot prices eased $0.01/lb. PE railcars were relatively plentiful and decent discounts were given for off grade. Processors were active in the market, too: Some were simply taking advantage of well-priced material, while others required urgent shipments to keep plants running because of late railcars. PE contracts held steady in October, and while producers are seeking a $0.05/lb price increase for November, chances of a successful implementation are fading fast, according to PlasticsExchange analysts.

The propylene market was fairly quiet: Just a few transactions were seen with little price movement.

Spot PP trading activity improved: Numerous transactions were completed and the market relinquished the penny that was gained in the previous week. While production complications continue to plague the industry, material availability seems to be growing. As processors begin to look toward year-end, some have begun to sell off unneeded material at facilities around the country. Several million pounds of prime and off-grade PP have been made available in different geographic locations, enhancing liquidity in this otherwise tightly supplied market. October PP contracts rose about $0.03/lb on average, and producers are looking to expand margins again in November.

Read the full Market Update on the PlasticsExchange website.

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