After a very slow start, July actually turned into the busiest month of the year, moving right past January, writes the PlasticsExchange (Chicago) in its Market Update.
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Spot polyethylene (PE) prices were mostly lower, which pumped up processor demand and contributed to high turnover. The export market was lively, with solid interest from Mexico and Europe; Asian traders remained cautious regarding low-density (LD) and linear-low-density (LLD) PE because of the tariff situation, but they were open to buying tariff-exempt high-density (HD) PE, according to the PlasticsExchange.
Polypropylene (PP) demand was good, though off from the swift pace seen in recent weeks. Off-grade supply has become more plentiful, and the discount grew compared to more scarce prime material.
Spot PE trading remained very busy and prices were mixed, but mostly lower. Transactions were plentiful and well spread across the commodity grades of LLDPE, LDPE, and HDPE. A combination of massive upstream supplies and tariff-related uncertainty weighed on the Houston market, causing LDPE and LLDPE for film to weaken by as much as $0.02/lb; injection grades lost as much as $0.03/lb, as supplies improved and premiums eased. HDPE for injection, which is unaffected by the potential tariffs, firmed up a cent. Despite the continued effort to implement the outstanding $0.03/lb increase, the PlasticsExchange expects the contract PE market to roll flat in July with the potential to lose ground in August.
PP trading continued to pull back from the fervent pace seen earlier in the month. Transactions were mostly driven by demand as opposed to suppliers seeking to move uncommitted resin. Prime PP material has become more scarce because of reduced production rates. Off-grade supplies, on the other hand, have been actively flowing, with good availability of both domestic railcars and packaged material in Houston, which are a very good value compared with relatively high-priced prime.
As anticipated, PGP settled flat for the month of July. PGP prices have inched up late in the month and currently point to a higher contract value in August. As such, prime PP prices rose $0.02/lb on average.
Read the full Market Update on the PlasticsExchange website.