Weekly resin report: The market remains bearish, as processors await lower prices

With just three shopping days last week, spot resin trading was on the light side, reports the PlasticsExchange (Chicago) in its weekly Market Update.

Even though completed volumes were not bountiful during the Thanksgiving-holiday-shortened week, polyethylene (PE) prices continued to erode, dropping another $0.01 to 0.02/lb of the hurricane premium. Bearish sentiment has been growing, and much of the buying was for resin to run over the long weekend, rather than procuring for use several weeks out. Processors in general continue to work down inventories and delay purchases awaiting lower prices. Resellers have been willing to deal on price as they seek to work down their uncommitted stocks. Rising crude prices have international resin buyers pinging the U.S. market to gauge price and opportunities. 

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HDPE for film and blowmold slid another cent, while injection grade material lost $0.02/lb as availability improves. LLDPE Butene shed a penny, but the higher alpha olefins were firm amid snug spot supplies, according to the PlasticsExchange. LDPE for film also held flat, having already been hit hard. The overall PE market continues to slide toward pre-Harvey levels and can potentially drift below as new production continues to come online. The export markets have been slow due to Harvey-related price and availability issues, but they can quickly get back to full speed when producers aggressively pursue it. In the meantime, PE producers have some room to restock after a three-month, 700-million-pound draw from their collective inventories. 

The polypropylene (PP) market was flat and few spot deals were completed, reports the PlasticsExchange. CoPP was more challenging to source than HoPP, although demand was not stellar for either of them. PP is in a very different situation than PE, as new production won’t be added for years to come. There are some streams of imported material starting to reach U.S. shores, but the flow is much gentler than what was seen in 2016. November PP contracts will get a small bump up; PlasticsExchange analysts maintain an upward bias on PP prices.

Read the full Market Update on the PlasticsExchange website.

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