Though the flow of both spot offers and resin requests slowed from the rampant pace seen throughout January, the PlasticsExchange (Chicago) reports that a series of relatively large transactions generated an overall high volume of completed resin deals at its trading desk last week. Several fresh railcars were offered early in the week, but as material sold, availability dwindled, which is typical into month-end, said the resin clearinghouse in its Market Update.
|Image courtesy Cool Design/
Spot polyethylene (PE) prices were mixed—up, down and flat, depending on grade. Despite a $0.04/lb PE price increase nominated for January, contracts remained unsettled across the market as the end of the month approached. Spot polypropylene (PP) prices edged up a penny after a strong purge of material seemed to clear, leaving unfilled PP demand chasing week-ago prices. Although PGP contracts were flat in January, PP contracts that were not tied directly to monomer lost a couple of cents or so. The PE and PP export markets were very active, with strong demand soaking up surplus materials.
The spot PE market took a breather after the intense pace set during the first part of January. Completed volumes were well below levels seen the rest of the month, but still ran right around our weekly 2019 average, reports the PlasticsExchange. Some prime low-density PE film grades finally emerged, but they came and went quickly—slightly looser supply eased a cent from its wide premium. Linear-low-density PE levels were either steady or narrowly mixed, while all high-density PE resins held flat.
January contract prices appear to be rolling flat, although lingering market talk suggests that an upward revision might still show. For now, it seems the four-cent nomination will roll to February with an additional nickel targeted for March. The export market remained active. Notwithstanding short interim cycles, it is expected to continue growing to help absorb the ever-expanding PE production base being developed in North America.
Spot PP trading was very active last week. There was a good mix of business between processors and traders, and railcar transaction volumes well-exceeded truckload sales, said the PlasticsExchange. Heavy export demand continues for Prime homo-polymer PP. The PlasticsExchange also reported seeing a good flow of domestic-destined co-polymer PP and said that it found a home for practically every good and well-priced railcar that came across the trading desk. A good number of PP truckloads needed for immediate shipment were also peppered in along the way.
By the end of the week, few stellar offers remained. Upstream resin inventories are anemic and exports have been growing, making one wonder how and why domestic PP pricing had become so sloppy. Producers began issuing three- and four-cent, margin-enhancing increases for March, trying to recoup some of the losses seen in these last few months.
Read the full Market Update on the PlasticsExchange website.