Spot resin trading was relatively strong last week, with a high volume of resin changing hands through the anonymous trading network of the PlasticsExchange (Chicago). There was no price movement either on polyethylene (PE) or polypropylene (PP), each of which simply held on to the few-cent gains achieved over the past month or so, reports the PlasticsExchange in its Market Update. There was some rumbling about the late $0.03/lb increase implemented in April and another price bump is on the table for May. PP contracts will jump at least a nickel on the heels of higher PGP costs, which eased this past week but remain elevated. Exports also slowed a bit amid continued trade war anxiety, but this growing sales channel remains a major market force to move material.
|Image courtesy Cool Design/
The spot PE market was steady this past week, consolidating at slightly higher levels. The flow of offers was reduced and completed volumes were a tad above average, though transactions slowed late in the week, according to the PlasticsExchange. Market participants digested the higher prices coming from the surprise implementation of a $0.03/lb price increase on April contracts.
PE processors who thought that they were stocking up a bit by procuring extra contract resin in April ahead of the (May) increase actually paid the increase on those buys, so there are some disgruntled buyers out there, as there were better buying opportunities in spot. There is yet another $0.03/lb increase on the table for May, which should shift negotiation discussions away from April. Some suppliers became emboldened with the higher market, and raised their asking prices. Since then, they have held firm, writes the PlasticsExchange.
Demand was strong in the spot PP market, as both resellers and processors were searching for well-priced deals. Most fresh railcar offers jumped up at least a nickel, in anticipation of at least a $0.05/lb cost-push contract increase for May. PP prices had been slowly grinding lower during 2019, so a quick reversal market created a little sticker shock for buyers. However, some traders still have older inventory on hand and have been willing to part ways with their material for a lesser premium and these presented relatively easy deals to complete. PGP monomer prices backed off a couple cents this past week, so it provided some comfort to buyers that prices will likely be contained in this range for the moment.
Read the full Market Update on the PlasticsExchange website.