Sponsored By

TPE resin prices, August 22-26: PE and PP prices mixed to lower; August contracts hold steady

Prices were mixed with a negative bias in last week's spot resin trading. Trading platform, The Plastics Exchange (TPE) noted that, overall, material flowed freely. Spot commodity resin markets began August strong as producers sought to implement contract price increases. The market proceeded to waver, however, giving back the gains as the increases fell by the wayside and leaving prices fairly flat.

PlasticsToday Staff

August 30, 2011

4 Min Read
Plastics Today logo in a gray background | Plastics Today

Prices were mixed with a negative bias in last week's spot resin trading. Trading platform, The Plastics Exchange (TPE) noted that, overall, material flowed freely. Spot commodity resin markets began August strong as producers sought to implement contract price increases. The market proceeded to waver, however, giving back the gains as the increases fell by the wayside and leaving prices fairly flat. After two months of decreases, August contracts for both polyethylene (PE) and polypropylene (PP) are rolling steady from July. In September, TPE expects PE producers to again try to enforce the same $0.05/lb increase they have attempted since May. PP contracts, meanwhile, will float with polymer grade propylene (PGP) monomer, which has been under slight pressure.TPE_prices_0.jpg

TPE resin prices, August 26, 2011

Energy markets were mixed in less-volatile trading, as October crude oil prices recouped most of the previous week's losses, adding $2.96/bbl to end the week at $85.37/bbl. That close is up nearly $10/bbl from the August low. Natural gas prices shed another $0.029/mmBtu to settle at $3.912/mmBtu on Friday. The crude oil : natural gas price ratio has now expanded to nearly 22:1.

Ethylene spot prices for prompt delivery were mildly higher creating more steepness to the forward curve. Operating rates are near capacity as there have been minimal cracker disruptions recently, although there are several due for planned maintenance. Ethylene for August delivery was firmer, last trading at $0.63/lb, and material for September also transacted around this level. Ethylene for delivery at the end of 2011 was sold with more than a $0.04/lb discount and even cheaper into 2012. Ethylene's net transaction price for both June and July was $0.5675/lb. The August NTP has yet to be determined.

Polyethylene's (PE) spot market started August boldly, according to TPE, but faded mid-month leaving the same nickel increase on the table. Although processors were unable to garner another price contract decrease after doing so in June and July, they did successfully stave off an increase. Spot PE prices were generally steady to a penny lower this past week, but benchmark HDPE blowmolding gained $0.005/lb. This material, which is a high-volume export commodity, has been trading close to the price of spot ethylene monomer, keeping reactor operating rates high, but providing very little incremental margin. HDPE blowmolding supply/prices have therefore been susceptible to subtle changes in monomer costs which rose a bit last week.

Propylene spot-trading activity was better and prices were mixed. Refinery grade propylene (RGP) for August delivery last changed hands at $0.685/lb a tad above the previous week's final trade. After going much of the month without a spot deal, PGP finally transacted at $0.76/lb, down a couple cents from the last trade seen for August and below the current PGP contract price. September PGP also traded around this same level. Nominations for September PGP contracts emerged both flat and $0.02/lb higher.

Polypropylene (PP) spot prices shed another $0.005/lb and now sit $0.02/lb below the level seen during the first week of the month. August contract prices rolled steady along with PGP monomer, and while PGP contracts for September have been nominated as much as $0.02/lb higher, processors do not fear an increase. The offgrade market is once again starting to offer a discount to prime material, after the traditional gap had nearly closed in July. TPE notes that downstream inventories seem ample, partly due to hefty purchases the past few months, and picky buyers appear to be waiting for special opportunities.

Final thought from Michael Greenberg

The spot resin markets were not overly exciting this past week; volumes were decent and prices mostly a little lower. After high volatility during the first half of 2011, the markets have quieted down and prices have been relatively stable. Upstream inventories are heavy and downstream demand is good, but not great, contributing to steady contract prices in August. The export market for Polypropylene has been challenging to regions others than Latin America. Polyethylene export demand coming from the Indian/Asian region has also slowed. Hmmm - it is hard to make a lackluster market sound exciting.

Sign up for PlasticsToday newsletter

You May Also Like