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Resin prices continue to slide

Spot resin trading activity slowed significantly during the first week of August, as befits the dog days of summer. The market was well supplied with material and prices fell further, reports the PlasticsExchange in its weekly update.

Spot resin trading activity slowed significantly during the first week of August, as befits the dog days of summer. The market was well supplied with material and prices fell further, reports the PlasticsExchange in its weekly update.

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Houston's spot market is fluid: Most commodity grade polyethylene (PE) material can be sourced in packages for immediate shipment and at reduced prices. Processors seem to have adequate resin stocks on hand, and some have expressed a desire to work down inventories and wait to procure at lower levels, which seem imminent, note PlasticsExchange analysts.

Tumbling energy and feedstock costs negated a PE price increase for August. Still, it was rather early in the month to see several PE producers again push off their $0.05/lb increase that was initially nominated for July. Some followed with a price decrease ranging between $0.03 and 0.05/lb; several others have yet to announce.

Polypropylene (PP) producers are seeking to raise prices in August, but a small-ish decrease could ultimately come through, according to the PlasticsExchange.

PE trading was tempered this past week, mostly challenged by a lack of current demand. That along with plenty of spot availability resulted in PE prices falling, on average, $0.02/lb. Offerings were widespread, including domestic railcars as well as packaged material from Houston traders and resellers around the country. Producers took good note of market conditions and instead of pursuing their $0.05/lb price increase, actually reduced August contracts.

PP trading activity was relatively tepid—supplies remained light and offers were sporadic due to ongoing production issues. Average PP market prices dropped about $0.02/lb this week. PGP contracts should decline by several cents in August, and despite producers' intent to increase contract margins by $0.05/lb, which would translate into an actual rise in resin prices, a modest decrease is more likely.

For the full weekly report, which includes analysis of the major energy markets, go to the PlasticsExchange website.

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