Resin Price Report: Prices Stabilize as Deals Flourish

The monthlong heightened pace of spot resin transactions carried over into the first day of November, writes the PlasticsExchange in its Market Update reporting on the week of Oct. 28. Offers continued to flow, although domestic prices did not push lower, leaving all commodity grades of polyethylene (PE) steady for the week. However, PE export prices dropped for November as North American producers compete for orders against resin from other regions.

Polypropylene (PP) orders narrowly outstripped those for PE at the PlasticsExchange trading desk. Copolymer PP was the biggest mover and lost a cent of its premium over homo-polymer PP, which held flat. Railcar volumes exceeded truckload business, as some buyers reckoned that prices had fallen enough to justify procurement in higher quantities. Packaged truckloads commanded a healthy price that buyers were willing to pay for quick shipment.

Calls amplified for a $0.03/lb decrease for October PE contracts, but some producers weren’t hearing it and kept prices flat. October PP contracts will follow polymer-grade propylene (PGP) contracts down $0.06/lb, bringing the two-month relief to a shiny dime.

Final month of 2024 hurricane season

Friday, Nov. 1, ushered in the final month of this year’s official hurricane season. While it has been active, just as meteorologists predicted, the storms mostly avoided the Texas and Louisiana areas, where plastics are primarily produced, and instead devastated the Southeast, which is still recovering. We are not out of the woods yet, cautions the PlasticsExchange: Three new storms are brewing at the time of writing and at least one of them could develop and head into the western part of the gulf in the coming week.

Strong volumes in PE market 

The PE market maintained a busy clip through the end of October and into the first day of November. Completed volumes for the week were strong, though a bit below the exceptional amount completed the previous week. Prime PE dominated transactions at the PlasticsExchange trading desk. The major mover of the week was low-density PE, both film and injection grades, followed by high-density PE for blow molding and then injection, and finally linear-low-density PE for film and injection. Some producers  continued to lower export PE prices to remain competitive with offers from other regions, particularly from China as its freight softened further. Spot prime prices in the domestic market held steady, however, as producers pumped the brakes on the decline seen during October, when prime grades slid an average of $0.03/lb at the resin clearinghouse.  

Despite the lack of movement in pricing, producers still have their work cut out for them, with high upstream inventories weighing on the market amid softer export pricing, notes the PlasticsExchange.

On the contract front, increases have been pushed out again into November. October was moving closer to a three-cent decrease, despite producers' best efforts to keep prices from officially dropping. Market conditions could change if any of the Atlantic/Caribbean weather disturbances develop and impact resin production.

Spot PP trading stayed busy, although not as much as the previous week. A relatively steady stream of well-priced off-grade railcars, along with several spurts of Prime, met with good demand, including from Mexico. Resellers had already largely liquidated most of their surplus packaged PP; those with ready-to-ship material commanded a premium, and generally got it if their resin was needed. After an extended period of spot market erosion, which has been embraced by buyers looking to replenish some of their drawn-down stocks, homo-polymer PP prices seemed to stabilize, while spot copolymer PP shed another cent, relaxing the premium over homo-polymer PP to a nickel.

PP contracts echo erosion in PGP monomer prices

October PP contracts are settling down $0.06/lb, commensurate with the drop in PGP monomer costs. The two-month $0.10/lb price relief, which more than erased the $0.09/lb rise over the previous three months, seemed to be enough to satisfy processors, who were strong buyers during the second half of the month. It will be interesting to see if PP producers kept reactor rates throttled back enough during October, even in the face of good downstream demand, to reverse some of the inventory builds that occurred during August and September, writes the PlasticsExchange.

Read the full Market Update, including analysis of the monomer and energy markets, on the PlasticsExchange website.