Weekly resin report: Most spot PE, PP prices shed a penny

Plastics processors hit the pause button last week, following a burst of aggressive buying, but overall completed volumes in resin trading still tallied above average, reports the PlasticsExchange (Chicago) in its Market Update. Fresh offerings for both polyethylene (PE) and polypropylene (PP) were a bit heavier and prices for most grades shed a cent. With contract increases intact for both PE (April) and PP (May) and ample resin supplies available, there was little need to chase material, though current spot resin offers present very good value compared to contracts. International PE prices and demand were both softer, but large volumes are still shipping offshore.

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Spot PE trading maintained a busy pace, with heavy volumes transacting ahead of the three-day weekend. The recent breakneck pace continued until Friday, when activity chilled and participants took early leave for the holiday. With contracts marking $0.03/lb higher since April, PE buyers have been accessing the spot market for favorably priced deals and finding good results, according to the PlasticsExchange. Overall supplies seem plentiful, with the occasional specialty grade harder to source than others. Spot prices retreated a penny for most commodity grades, except for low-density PE film and linear-low-density PE injection, which were flat last week. May contract prices seem to be rolling flat as expected after a surprising 3-cpp increase last month. With additional new capacity slated to come online, some buyers are already hoping for that increase to be peeled back in June, but producers will do their best to stand their ground.

PP trading slowed, with completed transactions returning to a more normal pace. Demand has waned a bit in the face of a sizable cost-push price increase, which should settle at a nickel or maybe more for May. Still, processors continue to procure material, but with less tenacity, said the PlasticsExchange. There was a heavier flow of fresh railcar offerings as resellers sought to shed material they had committed to earlier in the month. Spot PGP prices have eased and market sentiment has become less frothy; consequently benchmark PP prices at the PlasticsExchange retreated by a penny. Exports to Mexico have been very good this month, as monomer/resin prices have been tracking the U.S. market closely, leading to stable demand.

Read the full Market Update on the PlasticsExchange website.

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