TPE resin pricing: PE, PP, and PS higher 4495

With spot demand in North America still outpacing available supply and buyers quickly picking up the few fresh railcars shown to the market, spot polyethylene (PE) prices gained nearly every day last week, according to Michael Greenberg, CEO of spot-trading platform, The Plastics Exchange (http://www.theplasticsexchange.com). The result is that the $0.05/lb price increase nominated for June PE contracts was fully implemented, and a $0.07/lb increase is already nominated for July. Producers have stayed out of the spot market, according to Greenberg, waiting instead for price increases, while resellers have stepped in, selling off warehoused materials at higher prices. PE continues to rise on the basis of increases in prices for ethylene monomer, which gained more than $0.15/lb in the second quarter. The situation has been exacerbated by short supplies due to reduced operating rates by producers that crack heavy feedstocks. Greenberg notes that a recent run-up in ethane prices has helped level the field, with more monomer info at www.PetroChemWire.com.

In spite of this, U.S. PE has regained its competitive position on the world market, prompting strong demand from Europe, South America, and Asia. This export interest has forced domestic processors to compete with exporters for spot material, pushing resin prices yet higher. Greenberg speculates that in spite of these upward pressures, processors might be tempted to procure spot material, as they look at the August market, where an $0.08/lb increase has already been floated.

The polypropylene (PP) spot market also remains strong, jumping another $0.04/lb last week, fed by escalating costs and limited fresh offerings. TPE reports that resin production issues have exacerbated already tight supply conditions and sellers still possess tremendous pricing power. June price increases of $0.08/lb have been largely implemented, with an additional $0.08/lb proposed for July contracts. Increases as large as $0.18/lb, based on polymer-grade propylene (PGP) monomer contract settlements, have been posited. Greenberg says that spot offers are disappearing nearly instantly and despite decent liquidity, each day ends with very low offer volumes. Here too, limited producer offerings have pushed resellers into the market, allowing them to offer old and difficult-to-move material. Domestic PP’s only export markets have been traditional destinations in Mexico and South America.

After a brief pause, polystyrene (PS) rose again last week, climbing $0.02/lb after a run up in benzene and ethylene. Producers successfully implemented $0.04-$0.06/lb price increases on June contracts and are seeking another $0.03-$0.04/lb in July. Greenberg says price increases might stall, however, on the basis of an overall decline in benzene, which fell more than $0.10/gal in the June spot market. In spite of the overall spate of bad pricing news, Greenberg did point out that one month into the hurricane season, the Gulf Coast, and its petrochemical presence, remains unscathed.