is part of the Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Weekly resin report: New year begins with PP, PE price rises

Weekly resin report: New year begins with PP, PE price rises
The volume for completed transactions was high and prices for both polyethylene (PE) and polypropylene (PP) rose, some sharply, during the first full business week of 2017.

The first full business week of 2017 saw spot resin activity pick up dramatically. Volume for completed transactions was high and prices for both polyethylene (PE) and polypropylene (PP) rose, some sharply, reports the PlasticsExchange in its weekly Market Update. There was clearly some pent-up demand, as buyers came out in droves to procure material. The markets were further ignited by price-increase pressures, which gained credence amid firm and/or rapidly rising monomer costs and light resin inventories throughout the supply chain. Houston area logistics remained challenged by rail congestion and packaging houses still operating at full capacity. Exports remained robust, but will likely be trimmed back a bit as U.S. resin prices rise. 

Cool Design
Image courtesy Cool Design/

PE trading was very good: Transactions were above average and prices rose as much as $0.02/lb. Processor demand improved and those in need of material were willing to pony up for prompt shipments. The market is not yet flush with resin, but liquidity began to rebuild after the extended holiday-affected market. The rising spot market has been quickly closing its discount gap to contracts and some grades are now premium, which adds credibility to the $0.05/lb price increase nominated for February. In the meantime, there is still opacity regarding the $0.02/lb decrease that some, but not all, saw for December contracts. 

We felt it coming, writes the PlasticsExchange, and it now seems that PE exports reached record levels in December, likely even eclipsing the billion pound milestone. Processor demand was also better in December, but only back to the 2016 monthly average. 

The spot PP market was very busy—the flow of resin offers was only sporadic, but available material did not sit around very long. Both processors and resellers were active buyers, securing practically every well-priced prime offer that came available, according to the PlasticsExchange. PP prices ticked higher throughout the week; as offers were sold, they were generally replaced with fewer loads at higher levels and ended $0.03/lb above last Friday.

The PlasticsExchange has been vocally bullish for the past six weeks, advising buyers to rebuild inventories at prevailing historic bargain prices. While it took time to open considerable export channels, offshore sales have begun to hit on all cylinders. PP exports in December reached about 1000 railcar equivalents, 10 times year-ago volumes and the most since June 2009. Domestic demand also increased substantially from October/November levels, but like PE, it is only back to 2016 averages. The better sales, coupled with disciplined production, contributed to a consecutive sizable draw from aggregate producer inventories, together almost 300 million lbs, leaving them the lightest since the PlasticsExchange began tracking these figures more than 10 years ago. 

With PGP monomer soaring, PP inventories very light throughout the supply chain and pricing power firmly back in seller’s hands, the PlasticsExchange anticipates potential for considerable upside still ahead for PP prices.

Read the full Market Update on the PlasticsExchange website.

TAGS: Materials
Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.