After a couple of quiet weeks, buyers flocked back to the spot resin trading market, where they found sellers to be a bit more liberal with pricing, reports the PlasticsExchange in its Market Update.
Railcar offerings were again on the heavy side the week of April 17, with some larger waves of off-grade rolling through, along with more visible prime availability. Completed volumes for both truckloads and railcars improved, with transactions slanted toward polyethylene (PE) and well spread out among the commodity grades. Polypropylene (PP) activity also was respectable; buyers were more focused on co-polymer than homo-polymer PP.
PE prices slip a penny
Spot PE prices slid a cent at the end of the week at the PlasticsExchange trading desk, the first movement of the month. PP prices dropped another two cents, doubling up their April losses. PP contracts are set to drop sharply this month, and spot prices got a head start on the decline, with sell offs already beginning in late March.
Weaker price direction comes amid looser availability for both major resin groups, as producers contend with plentiful inventories that regrew in Q1, making the impact of current force majeures — four for PE and two for PP — pretty much irrelevant, according to the PlasticsExchange.
PE was the more active resin, and for a change of pace, volume was above the weekly average seen so far in 2023. There was a good mix of normal buying as well as some larger purchases by processors who procured well-priced material to cover their May needs. Linear-low-density PE was the major mover with good volumes of both Film and Injection grades transacting. Some low-density PE Film also traded, as did a smaller volume of high-density PE.
Proposed nickel increase will probably fizzle
Direct resin export sales stayed strong: March surpassed two billion pounds, a notable number, with discounted material supporting healthy incremental sales this past week. Though producers have an average nickel increase on table for April, the market is likely to settle flat, holding on to the six cents implemented during the first quarter, which includes three cents that somehow managed to take hold in March, writes the PlasticsExchange.
PP trading activity improved, but completed deals mostly involved co-polymer, as more than ample homo-polymer supplies stifled buying interest unless needed for prompt processing. Both PP grades dropped a couple of cents, with co-polymer PP maintaining its nickel premium to homo-polymer PP.
PGP costs on downward trend
The downticks came as polymer-grade propylene (PGP) costs eased further, even in the face of propane dehydrogenation (PDH) unit disturbances. April resin contracts will follow monomer down more than a dime, as the market gives back a large chunk of the Q1 gains, according to the PlasticsExchange. The attempt to recoup some margin in April has not found support, given unfavorable market conditions; if the market tightens, a more concerted effort may emerge next month.
Read the full Market Update, including news about PGP pricing and energy futures, on the PlasticsExchange website.