Resin Price Report: Cheap Resin Era Coming to an EndResin Price Report: Cheap Resin Era Coming to an End

The traditional resin producer purge started early this year, with the vast majority of deep discounts appearing in October and November, leaving just a light flow of material for December, reports the PlasticsExchange in its Market Update. Even so, the resin clearinghouse said it fielded steady demand for truckloads the week of Dec. 16, as processors sought resin to run and resellers filled in supply gaps.

Discounts too tempting to pass up

Although downstream participants also like to lighten their resin stocks as the year comes to a close, some of the discounted deals were too compelling to pass up. After a long down leg to this cycle, market sentiment has been improving. Prime resin prices at the PlasticsExchange ended the week steady to higher, with most polyethylene (PE) grades unchanged, while polypropylene (PP) picked up a full penny as monomer prices firmed up.

Rush to export resin ahead of possible port strike

Producers may be done with their clearance sale, but Houston-area warehouses remain packed with resin, which restricted incremental sales because of limited space and reduced bagging rates. There has been a big rush to load export resin onto ships prior to year-end and especially before another potential port strike in mid-January, notes the PlasticsExchange.

Chinese demand pushes up price of LDPE for film

PE trading remained relatively busy the week of Dec. 16; off-grade railcars continued to roll in while fresh Prime railcars were noticeably scarce. All major PE grades traded, with low-density PE the major mover, just slightly edging out high-density PE grades. Low-density PE for film was also the only grade to record a weekly increase, adding a half-cent, bringing the two-week rise to $0.015/lb amid strong Chinese demand and sparse supplies.

Some export cars were still available but they were contingent upon packaging space, and prices were generally up $0.02 to 0.03/lb from late-November levels. December PE contracts have yet to settle, but producers are looking to roll them flat from November and nominating a $0.05 to 0.07/lb price increase for January.

Prime PP pricing rises a penny

The PP market was much slower than the previous week at the PlasticsExchange trading desk. The homo-polymer PP business outstripped copolymer PP, but neither were overly exciting, said the resin clearinghouse. Domestic buyers picked away, as needed, while there was good demand from Mexico. Prime pricing for both grades was up a penny, in alignment with the feedstock polymer-grade propylene (PGP) monomer market. PP spot levels increased for the second straight week, an indication that the price decline processors have been enjoying since August may be coming to an end.

December PGP contracts are settling down $0.025/lb, and the PlasticsExchange said it expects highly correlated PP contracts to drop the same amount this month. Monomer prices seem to have found their bottom — January PGP has rallied about $0.045/lb since Dec. 3 — pointing to higher contract PP prices come January.

To read the full Market Update, including reports on monomer trading and the major energy markets, go to the PlasticsExchange website.