Spot resin trading started slowly last week but gathered steam as the week wore on. Completed volumes were solid, but not stellar, and transactions were heavily weighted in favor of polyethylene (PE) over polypropylene (PP), reports the PlasticsExchange (Chicago) in its Market Update.
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The bottom end of pricing firmed further, but overall levels for both commodity resin groups remained flat across the board. The flow of fresh railcar offers was fairly steady, with added liquidity provided by traders making their uncommitted warehoused inventories available for immediate shipment. Producers have their $0.03/lb PE contract increase on the table for April; however, the market will likely remain steady, according to the PlasticsExchange. PP contracts could see a small cost-push increase come through. Resin exports continue to shine; there is good PE demand from all regions, while high-quality PP exports are generally shipping to Latin American countries.
The spot PE market stepped up its pace, with healthy completed volumes despite many people taking Friday off. The PlasticsExchange trading desk completed an above average number of transactions, as buyers came to the market to buy for prompt delivery as well as in anticipation of future needs. Activity was spread pretty evenly among grades. Although spot prices were flat this week, market sentiment remains slightly bullish in the short term as availability has tightened up a tad. Overall pricing has generally been very stable over the past few months with spot volatility restricted to a few cents. April contract prices have yet to settle, but will likely roll flat again. Assisted by higher crude oil prices, export opportunities continue to pelt the U.S. market as resin is flowing strongly to all regions.
PP trading was lackluster this past week. Demand was off and fresh offerings also fell short of their usual pace, reports the PlasticsExchange. Buying activity mostly came from processors seeking to fill in their immediate needs with some reportedly adding to on-hand inventories. After recovering a penny or two from the cycle low, spot PP levels held steady for the second week in a row. Spot PGP monomer prices still support a modest price increase, while the forward market indicates an upward trend has already begun and could accelerate as time ticks. The PlasticsExchange said that it has added to its inventory positions and maintains a friendly sentiment toward the market. The resin clearinghouse believes that the PP supply/demand dynamic is tight enough that any further production issues could trigger rising resin prices, especially considering the bullish monomer curve.
Read the full Market Update on the PlasticsExchange website.