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Resin Price Report: Spot PE Prices Climb HigherResin Price Report: Spot PE Prices Climb Higher

Spot PE prices have rallied $0.03 to 0.04/lb since their December low, and are up $0.015/lb from October.

Staff

February 2, 2025

6 Min Read
blue and green plastic resin
Irina Vodneva/iStock via Getty Images

Since hitting cycle lows in early December, commodity resin trading continued to accelerate the week of Jan. 20, with high volumes of polyethylene (PE) and polypropylene (PP) changing hands across the spot marketplace at the PlasticsExchange. Prices for both resin groups climbed higher as the week progressed.

Ethylene and propylene monomer costs rose further, as planned maintenance and unplanned outages lent good cost-push support to resin prices. Prime domestic railcar offers were slow to develop in January, reports the PlasticsExchange: PE cars were mostly available with the full $0.05/lb increase included, and Prime PP cars could be had on a monomer-plus basis. Houston warehouses are still packed with resin, but most of it is committed to export orders awaiting shipment. Most resellers have thinly available stocks in Houston and around the country, according to the PlasticsExchange in its weekly report.

After consecutive record PE exports in November and December, incremental offers were light in January, affected by rising monomer costs squeezing margins, logistics bottlenecks and packaging constraints, a huge upstream resin inventory drawdown in December, and fresh production outages. Meanwhile, export demand remained healthy, particularly from Europe, Africa, and Latin America, and buyer price expectations have been rising. Export offers that were floated early in the month that seemed priced too high, were now deemed competitive and scooped up the week of Jan. 20. It will be interesting to see if Asian interest returns with fervor after the Lunar New Year break, writes the PlasticsExchange. Domestic processor demand has strengthened, as well, and spot orders for PE and PP streamed in; however, some railcar offers were pulled back by suppliers as the first true test of winter weather hit the US Gulf Coast this season.

Related:Resin Price Report: Resin Shopping Spree Closes Out the Month

Storm has limited effect on resin producers

Winter storm Enzo blanketed the Texas/Louisiana coast with snow and ice amid a series of overnight freezes during the week, and while Enzo’s impact on the resin supply chain was not nearly as bad as Winter storm Uri back in February 2021, many petrochemical and plastics producers along the Gulf Coast were still affected. Major resin producers in harm’s way implemented storm preparedness measures, with some shutting down ahead of the hard freeze, while other facilities continued to operate at reduced rates. Several steam crackers, which make ethylene and propylene monomers, were also shut down, adding to the production loss as several crackers were already offline for planned turnarounds. Enterprise PDH-1 went offline and has yet to return to production, limiting polymer-grade propylene (PGP) availability.

Related:Resin Price Report: After Initial Sticker Shock, Resin Buyers Pony Up

While the feared mid-month port worker strike was avoided, the ports of Houston and New Orleans, two of the nation’s busiest maritime hubs, temporarily shut because of icy and hazardous road conditions leading to the terminals. The majority of resin packaging warehouses in the Houston area were also closed, further backing up railcars and prompt resin availability. Although these disruptions were short lived, issues will linger as more ocean shipments are rolled to later sailings.

Trump tariffs impact PE flow in North America

The Trump administration’s 25% tariff increase on imports from Mexico and Canada will impact the flow of PE throughout North America, particularly PE exports from Canada into the United States. This could challenge producers either to absorb the tariffs, lower prices to remain competitive, reduce sales to the United States, or shift some production between US and Canadian facilities. Several producers have proactively moved products across the border in advance of the tariffs. One Canadian PE producer, Nova Chemicals, sent a letter to customers assuring that Nova is the importer of record and they would be responsible for paying the tariff.

Related:Resin Price Report: PE, PP Prices Rise Across the Board

PE prices shoot up

Prime PE had a very strong showing, with buyers taking a more aggressive approach to purchasing as Enzo’s freezing conditions disrupted some PE production. Completed volumes for PE were well above the typical average at the PlasticsExchange, and, once again, export volumes exceeded domestic sales.

Low-density (LD) PE for film was the biggest mover, although linear-low-density (LLD) PE and high-density (HD) PE for film and injection had a strong showing, too. HDPE for blow molding has been scarce, which has been limiting prompt sales. Spot PE prices shot up between $0.005 and 0.015/lb, depending on grade. Not only did the Enzo freeze play a part in the rise, but rising feedstock ethylene costs, sparse spot domestic railcar availability, and rising spot PE levels all support producers’ effort to implement their January price increase, which averages $0.05/lb, writes the PlasticsExchange. Most producers have nominated another $0.05/lb PE increase for February contracts, which will keep upward price pressure on the PE market next month.

Spot PE prices have rallied $0.03 to 0.04/lb since the December low, with variance by grade, and are up an average of $0.015/lb since the end of October, which was the last time the major industry indices recognized a PE price change, down $0.03/lb. Transactional PE prices slipped further during November and December, and there were surely unofficial non-market adjustments and discounts negotiated by those buyers savvy to spot levels, according to the PlasticsExchange.

“The market is definitely up in January, but from what level should the magnitude of the increase be considered?” writes the resin clearinghouse in its market update. “Since the major indices usually record upward price movement but tend to overlook interim down cycles, it is tough to suggest how much of this month’s PE increase should actually be implemented. We feel that $0.02/lb is easily warranted given full Q4 price activity, and the spot market is up at least $0.035/lb since the December low. Considering the January production disruptions, cost-push support, and strong upward spot market momentum, we can see the entire $0.05/lb taking hold this month for most of the industry and, if bullish conditions remain, full implementation industrywide in February,” writes the PlasticsExchange.

Prime PP prices up $0.06 since hitting bottom in December

Completed PP orders paled in comparison to PE the week of Jan. 20. PP buyers picked away at offers, mostly in truckload quantities with some railcars changing hands, as prices jumped along with firming monomer costs. Good off-grade PP railcars have been selling, while lower quality material has lingered, even as monomer and prime PP prices rise. Reduced production, rising feedstock costs, and overall tighter supplies were already the trend supporting a PP recovery. These conditions were further spurred by Enzo putting the freeze on some Gulf Coast PGP and PP producing facilities. This helped lift Prime homo- and copolymer PP prices by another $0.015/lb. They are now up $0.06/lb since finding a bottom in December, writes the PlasticsExchange.

Even with this moderate run up, resin is still lagging the spot monomer recovery, which has now extended to $0.10/lb. The PlasticsExchange expects PP prices to continue to rise and perhaps catch up. January PP contracts are set to rise along with contract PGP costs, as spot monomer continues to rally, and both contracts are starting to home in on a $0.05/lb increase. Even considering a nickel jump in January, there would still be a few more cents on the table for February, given current PGP levels. Several PP producers have nominated a $0.03/lb increase for February in addition to the change in PGP monomer costs. Producers have mostly stopped selling incremental Prime PP cars for January, opting to instead book February railcars on a monomer-plus basis.

A note to PlasticsToday readers: The PlasticsExchange 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.

About the Author

Staff

Informa Markets Engineering

The Informa Markets Engineering network of B2B media sites includes Design News, Battery Technology, Medical Device & Diagnostic Industry (MD+DI), Packaging Digest, PlasticsToday, and Powder & Bulk Solids.

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