Resin Price Report: After Initial Sticker Shock, Resin Buyers Pony UpResin Price Report: After Initial Sticker Shock, Resin Buyers Pony Up
Tight availability, rising feedstock levels, and higher replacement costs drive rise in asking prices.
January 27, 2025

Mid-January was a busy period for commodity resin trading, as processors became more aggressive in procurement while supplies remained largely restricted. The flow of widespec railcars continued much more so than Prime, and asking prices at the PlasticsExchange continued to step higher amid tight availability, rising feedstock levels, and higher replacement costs, reports the resin clearinghouse in its weekly update.
Prime polyethylene (PE) grades rose another half-cent on average, while polypropylene (PP) gained $0.015/lb. Asking prices for Prime railcars in both the domestic and export markets reflected producers’ intent to secure January price increases. While the higher prices initially came as a shock, very few discounted deals showed up in the market and buyers are becoming more acclimated to rising levels. More overseas shipments are getting out, but many ocean bookings were also rolled, so warehouses remained full. Some embargoes are in place for new railcar shipments for packaging, though there seemed to be some availability developing for early to mid February.
The PlasticsExchange said it has a bullish outlook on PE and PP prices for at least the first quarter. Prices are relatively cheap on a historic basis, and the pricing cycles for both appear to be in early recovery. A series of favorable fundamentals are coming together, while it seems that most potential shocks and surprises would be to the upside, according to the PlasticsExchange.
Weather events and potential Trump tariffs could disrupt resin market
Late in the week temperature forecasts in the Texas/Louisiana area dropped, with temperatures dipping into the low- to mid-20s in and around Houston, bringing a hard freeze along with several inches of snow. This brought back memories of winter storm Uri in 2021, which essentially crippled petrochemical and resin production in the state and paralyzed logistics before sending resin prices to record highs. Some producers announced precautionary measures to reduce or shut monomer and resin operations. At the very least, this will result in lost production with the potential for more significant disruptions.
Potential disruptions could also arise if tariffs that have been threatened by the returning Trump administration are actually enacted. A 25% tariff ($0.10 to 0.15/lb) on resin imports from Canada and Mexico, such as PE produced in Canada by Nova, Exxon, and Dow, could force these companies to lower prices to remain competitive, reduce sales to the United States, or shift production between US and Canadian facilities. Spot sales from Canada could decline sharply, although branded Prime contracts would likely persist, with some tariff costs shared or absorbed by US customers. While this scenario would strengthen the US spot market, it would significantly weaken the Canadian market. The imposition of retaliatory tariffs by Mexico or China on US resin could further complicate the market, and such measures would negatively impact PE exports and PP to a much lesser degree, disrupting trade in the aggregate and intensifying challenges for US producers.
PE prices up for third straight week
Prime PE prices stepped higher for a third straight week. Most PE grades firmed up a half-cent, though prices for linear-low-density PE film rose a full penny. Spot PE prices are now up $0.025 to 0.03/lb from the December low. Limited spot domestic railcar availability is keeping upward pricing pressure on the market, as producers seek to implement a sizable increase for January contracts. A $0.05 to 0.07/lb increase is on the table this month, backed up by an additional nickel increase sought for February, according to the PlasticsExchange. It has been a long time since cost-push factors have come into play, but ethylene prices have shot back up into the low to mid $30s/lb, from just $0.22/lb in early December.
Exports continued to be a driving force: Strong PE export demand continues to be a significant market factor, as it has surpassed domestic PE sales for the second straight month. According to data recently released by the American Chemistry Council (ACC), December exports smashed all-time records, exceeding 3.1 billion pounds for the first time, an astounding 700 million pounds more than the monthly average for the rest of 2024. Although PE reactors ran hard, production was just shy of a record, and domestic sales were among the highest of 2024. Collective upstream inventories took the largest monthly drawdown since September 2022.
Reduced PP production at Heartland
PP trading activity was good, but tight supplies and rising prices sapped some buyers’ enthusiasm. Alhough completed volumes for both homo- and copolymer PP were fine, they did not keep up with their PE counterpart. Prices rose $0.015/lb on the week, but also lagged the $0.03/lb jump in polymer-grade propylene (PGP) feedstock costs. Truckload demand was strong — exceeding railcars sales at the PlasticsExchange — as buyers required quick material because of railcar and packaging delays.
The upward trek has been supported by limited prompt availability, especially as Heartland began a five- to seven-week turnaround at its propane dehydrogenation (PDH) unit in Canada. At the same time, Heartland's PP production is expected at reduced rates. This could be compounded further by reduced operations in the Houston area because of the winter blast. Although there were no proposed increases out for January, PP contracts are on track to see a $0.04 to 0.05/lb increase commensurate with the rise in PGP costs, writes the PlasticsExchange. Seeking to regain some margin, producers announced a $.03/lb price increase for February in addition to the change in monomer, which is already priced at a premium to January.
Domestic December PP sales lowest of 2024
A first look at December PP supply/demand data from the ACC showed that domestic PP sales in December were the lowest of 2024 and marked the fourth straight month of below-average sales. It was during this period of lax demand that processors worked off their hurricane inventory buffer built during the April to August timeframe, which saw five months of above average demand. Although there was a lot of price and sales volume volatility in 2024, when the dust settled, overall sales were very typical and just a tad above the five-year average. This last four-month period brought downstream resin inventories back to a neutral position, and now that prices are back on the rise — and the forward curve indicates higher monthly prices ahead — PlasticsExchange expects to see overall PP demand pick back up following a familiar price/volume cycle. For a more detailed look at PE and PP supply/demand data, readers are encouraged to subscribe to the ACC.
A note to PlasticsToday readers: The PlasticsExchange announced last week that it is discontinuing its free weekly Market Update and has launched, in its stead, Resintel, a subscription-based market intelligence platform that pulls together 20+ years of historical supply chain pricing and resin supply and demand data to identify actionable insights, correlations, and trends. The PlasticsExchange is offering a complimentary two-issue trial subscription at www.resintel.com.
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