Spot resin trading turned cautious as the calendar flipped to March, reports the PlasticsExchange in its Market Update. It took a strong Friday to bring the week’s completed volume up to a satisfying figure, said the Chicago-based resin clearinghouse.
|Image courtesy Cool Design/|
While there was a good flow of buyer inquiries, processors were a bit shy to confirm orders and those that did conclude, were generally for truckloads rather than railcars. Some additional deals were struck with resellers for urgent shipment because of railcar delays from Canada; otherwise, traders were looking to sell surplus inventory rather than add to current stocks.
Fresh polyethylene (PE) offers were slow to develop, with railcars perhaps held back as producers sought to keep the market tight with another $0.04/lb increase at hand. Fresh polypropylene (PP) offerings fared better, but at higher prices, as producers aim to secure a $0.03/lb margin increase for March. Export demand persisted, but primarily from regions other than Asia.
PE trading was on the light side and spot prices were steady to a penny lower, writes the PlasticsExchange. The flow of fresh offers was also slower, with few Prime railcars shown to the market, which was not surprising given the $0.04/lb price increase on the table for March. Spot demand was off as buyers remained cautious, caught between the need to procure material for ongoing business and growing economic concern due to the spread of the coronavirus. This was evident by the multitude of truckload orders, whereas railcar demand had reigned supreme during the first two months of 2020. Export demand continued to hum along, highlighted by Latin American shipments; the slowdown in China has not yet been overly evident in terms of excess material flooding the market.
Spot PP trading was unenthusiastic. The PlasticsExchange reported completing an average volume of transactions last week, with prices holding flat despite the coronavirus and geopolitical uncertainty rattling markets. There was a relatively heavy flow of off-grade railcars, but specifications were mostly undesirable. All Prime commodity PP grades were in moderate supply, and sellers generally sought a premium for material that was available for immediate shipment. Trading was evenly split between homo- and co-polymer PP, and off grade was favored over Prime, given price. Processors picked away with truckload orders and some railcars sold to traders with customer orders in hand, but not for their added inventory. Stronger spot prices and tight upstream resin supplies could help producers secure their $0.03/lb increase over the change in PGP monomer for March contracts, according to the PlasticsExchange.
Read the full Market Update on the PlasticsExchange website.