Spot resin trading was moderate the last week of April. While the total tally was about average for 2023, it was far behind year-ago levels, reports the PlasticsExchange in its Market Update.

Prime polyethylene (PE) prices were flat to a penny lower at the resin trading desk, as supplies improved, while polypropylene (PP) dropped a couple more cents amid falling feedstock costs. Buyers remained tepid despite the price cuts, and the competitive offers contributed to margin compression. It took a fairly urgent need or stellar offer to get processors to pull the trigger with a purchase order.

Lower prices ahead to spur export demand

Producer direct exports continued to flow at heightened levels, while incremental dealings through spot/broker channels were difficult given low international bids and relatively high offers in Houston. Good resin availability and discounted prices from the Middle East and Asia have attracted Latin American buyers, and there are expectations for lower US asking prices in May to spur extra export demand, according to the PlasticsExchange.

PE grades lose a penny

PE market activity easily outshined PP volumes as April drew to a close. There was a heavier flow of off-grade PE railcars, some at well-discounted prices, while spot Prime was again restricted but available for May forecasts. High-density (HD) PE for blow molding and injection moved the most, with low-density (LD) PE film resins close behind. Some EVA and roto molding dealings snuck in, as well. Although there are technically four active force majeure declarations still in place, supplies were largely plentiful. Some fractional melt HDPE resins were still somewhat snugly supplied, dashing some buyers’ expectations for lower prices. PE grades lost a cent across the board last week, bringing April losses to $0.02/lb. On average, PE prices are still up $0.02/lb since the beginning of the year. There are two major outliers: High molecular weight HDPE — the resin that is most affected by production disruptions — is up $0.07/lb, while LDPE film grades have dropped a net $0.01/lb in 2023, as its premium to linear-low-density PE has shrunk.

Overall PE demand has been improving, both in domestic and export markets, but producers seem to be capturing most of the added volume directly as opposed to using traditional reseller channels, writes the PlasticsExchange. April PE contracts are rolling flat, up $0.06/lb for the year. Producers will attempt their April nickel increase again in May.

PP trading was light. A relatively heavy flow of off-grade railcars rolled through, but high-volume buyers were hard to find. The best demand from the PlasticsExchange’s perspective came from processors seeking truckloads to tide them over while they waited for previously ordered railcars to arrive. Resellers have been ditching their inventories for the past six weeks, leaving some packaged co-polymer PP grades difficult to source. Still, overall availability is deemed ample and Prime railcars can be sourced with a little lead time as producers’ inventories have swelled after an increase in operating rates.

Another weekly decline in PP resin prices

PP prices at the Chicago-based resin clearinghouse peeled off another $0.02/lb last week, bringing April losses to $0.06/lb, and leaving spot prices up just $0.02/lb for the year. The PP market reversal has been swift and the break has totaled $0.11/lb ever since polymer-grade propylene (PGP) spot monomer costs found their top at $0.73/lb. PP contracts, while not fully settled, will likely average down around $0.11/lb, commensurate with the decrease in PGP. Margin expansion attempts fell flat this month and these efforts will be retried again. After the April decrease, PP contracts still sit precariously up $0.15/lb in 2023 and seem to be heading lower again in May.

Read the full Market Update, including news about PGP pricing and energy futures, on the PlasticsExchange website. For a comprehensive review of resin pricing and activity in the first quarter of 2023, read this analysis by Zachary Moore of business intelligence firm ICIS.