Spot resin trading held steady as the third quarter came to an end, reports the PlasticsExchange (Chicago) in its Market Update. Transacted volumes in September came close to the highest month of 2018. Polyethylene (PE) activity well outstripped polypropylene (PP) this past week, and prices were generally steady, though some less liquid grades still had room to fall . . . and they did.
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Overall PE market sentiment had already been shifting from bearish to neutral and now seems to be turning a bit bullish, according to the PlasticsExchange. The September PE $0.03/lb increase was secured. Strong crude oil prices lifted international PE prices, and soaring ethane costs in the United States have eaten into integrated PE margins. There is a mostly $0.03/lb price increase nominated for October. PP is well balanced and PGP costs have been fairly flat at this elevated level. The PlasticsExchange anticipates little change in October.
The spot PE market continued its busy pace into the end of the month; completed volumes were above average and prices were mixed. Plentiful material in the Houston area kept the market amply supplied, and there were still a few end-of-month deals to be had early in the week.
Sensing a shift in the overall tone of the spot market, now leaning toward bullish, buyers stepped up to aggressively purchase material, and sellers were happy to fill their orders and pad their third-quarter figures. As the lower priced offers began to clean up, firm bids were then resisted by sellers, who also felt sentiment changing in favor of a turnaround in pricing for October. Overall demand is characterized as good and, despite some lower pricing in the lesser commodity grades, like low-density PE and linear-low-density PE for injection, there is some slight upward price momentum at hand.
The PE contract market remained murky, even as September drew to a close as the $0.03/lb increase was implemented; for certain grades, however, it is unclear from which price level. What is clear is an additional increase is on the table for October, which averages $0.03/lb with a range of $0.02 to 0.04/lb. Trade issues between the United States and China remain on the forefront of the export and overall market; however, it appears the agreement between the United States, Mexico and Canada should inspire confidence that a deal can be also reached with China.
Following a busy third week of the month, PP trading at The Plastics Exchange was a tad quieter the final week of September. There was a steady flow of mostly off-grade materials with some discounts provided, while prices held flat for prime grades of both homopolymer (HoPP) and copolymer (CoPP).
Supply and demand were fairly balanced and completed deals were slightly below average. Material availability remained near its current level: Commodity grades can be readily sourced in relatively low volumes, while specialty grades remain scarce and command a sizable premium if available. Imports of HoPP Raffia, CoPP No Break and Random Clarified are generally selling out before they land on U.S. shores. That’s something to keep in mind when contemplating purchases of imported material. The PlasticsExchange anticipates little change in contract PP pricing for October.
Read the full Market Update on the PlasticsExchange website.