Resin Price Report: Price Relief on the Way
Polypropylene buyers will finally get some relief after three straight monthly price increases, as lower feedstock costs pass through to resin contracts.
October 4, 2024
The spot resin market ended September with a strong showing. Material availability improved and off-grade levels weakened, while Prime prices managed to stay steady but with a soft undertone, reports the PlasticsExchange in its Market Update.
Domestic processors were in buying mode, and export interest was elevated, although transactions remained challenging to complete as relatively high Houston asking prices were undercut by resin from other regions, including the Middle East and Asia. Business to Mexico, however, remained healthy.
Dockworker strike threatens resin distribution
While Hurricane Helene avoided the petrochemical producing part of the Gulf of Mexico, it had a devastating effect on Florida and the Southeast. This is just another reminder that we have two more months of hurricane season to go, and there are plenty of potential storms developing in the Atlantic and Caribbean, notes the PlasticsExchange. Market participants also took notice last week of the potential dockworkers strike in the Gulf Coast and East Coast. The strike did shut down many ports, including Houston, the primary export hub for US polyethylene (PE) and polypropylene (PP), a costly development for the overall US economy. Thankfully, the strike was short-lived and has been suspended, as negotiations continue surrounding automation at the ports.
PE commodity grades trade flat
PE trading remained relatively strong the last week of September. All PE commodity grades were flat at the PlasticsExchange trading desk, although a momentary half-cent dip showed up on Sept. 23 before bouncing back. A heavy flow of well-discounted off-grade railcars continued to dominate, well exceeding truckload sales.
Linear-low-density PE for film got the most attention from buyers, followed closely by high-density and then low-density PE. Export requests remained strong, but overseas buyers have maintained a wait-and-see approach while also looking at more competitive material from other regions. Supply/demand dynamics were viewed as negative, as final August data from the American Chemistry Council showed that PE producers again made a record amount of resin. Despite strong domestic and export sales, upstream inventories swelled to record levels.
On the contract front, September PE has yet to settle but looks to be moving toward a rollover, given mostly abundant supplies and especially after a couple of major producers relaxed their price initiatives from $0.05/lb to $0.03/lb.
The spot PP market was very active, with completed volumes outstripping PE, reports the PlasticsExchange, which is quite rare. Receding polymer-grade propylene (PGP) monomer costs have been working their way downstream into resins, and buyers were quick to pounce on nicely discounted railcars, both for homo- and copolymer. Packaged truckloads were readily available, with resellers seeking to move out inventories as the market softens.
September PP contracts down $0.04/lb
After three straight monthly price increases, PP buyers will finally get a nice dose of relief as lower feedstock costs are passed through to resin contracts. September PP contracts are finalizing with a $0.04/lb decline, and additional price relief is expected in October, according to the PlasticsExchange.
Read the full Market Update on the PlasticsExchange website.
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