Spot resin continued to transact at a rapid pace last week, reports the PlasticsExchange (Chicago) in its Market Update. Completed volumes remained high, favoring once again polyethylene (PE) over polypropylene (PP). Good trading activity was spread among all commodity resins, with film grades reigning supreme. Most prime materials were accessible at a fair price, making transactions relatively easy to complete. Nicely discounted off-grade deals also came and went, snapped up by savvy buyers.
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PE contracts are rolling flat in February, according to the PlasticsExchange. The initial $0.06/lb nomination was split into two $0.03 parcels for February and March, but then the plan just sputtered. Processors might call steady a win, while producers can celebrate standing their ground . . . at least officially.
PP contracts are decreasing this month, but by just a penny it seems. That could be considered light and maintain downward pressure on the market for March.
Spot PE trading hummed along at a quick clip and deals generally matched up without a hitch. Total volumes transacted through the PlasticsExchange reportedly were solid in both the domestic and international markets. Prime railcar prices stayed steady, but there was aggressive discounting for off grade. Export prices are trying to firm up, and some offers were raised a penny, but there is the looming feeling that another surge of material could be just around the bend. Still, firmer crude oil prices support the floor price for incremental sales, particularly export, and a lot of material is moving. It looks like February PE contracts will roll flat, but the PlasticExchange also notes that there is a growing gap between contract prices and lower spot levels, meaning that there are plenty of opportunities to make deals.
PP trading was about average: Completed volumes did not impress, while prices remained pressured. There were limited but readily available supplies of most PP commodity grades, with most buyers still only looking for minimal volumes. Spot prices for both homo- and co-polymer PP resins slipped another $0.01/lb as a result of continued weakness in upstream monomer prices. It appears that February PGP and PP contracts might only settle down a penny, which we would consider modest, writes the PlasticsExchange. The resin clearinghouse also recognizes that the PP market is “not actually sloppy” and the bigger picture provides for relatively balanced to tight supply/demand dynamics. Thus, the PP supply-chain margin expansion also can be easily justified.
Read the full Market Update on the PlasticsExchange website.