Weekly resin report: PE price rise wipes out three previous declines

Resin trading was deemed to be “good” the week of April 25 by the PlasticsExchange (Chicago) in its Market Update. The last week of the month saw heightened activity, solid demand and a thin, but available, stream of spot supplies. Polyethylene (PE) prices were mostly higher, with plenty of fluctuations between grades. Polypropylene (PP) slid a cent amid ample supply and soft spot demand. 

PE producers secured their $0.04/lb price increase in April, bringing the two-month contract advancement to $0.09/lb. Producers fully regained the previous three price declines: $0.05/lb in January/February and $0.04/lb back in September. There is not a cohesive increase effort for May. Despite the increase, domestic PE demand was very solid, as processors returned to the market after sitting on their hands to resist higher prices. 

Contrary to the final week in each of the previous two months, which saw a large purge of material, spot PE supplies were relatively limited at the end of April, which created a challenging trading environment. 

LDPE film grades continue to be tight and prices jumped another $0.02/lb. LDPE high clarity, which amazingly transacted at par to LLDPE butene in February, has regained a wide $0.06 to 0.08/lb premium. HDPE was a little soft, as traders and exporters eye fresh production from Braskem’s new reactor in Mexico, which has begun production. PlasticsExchange analysts report seeing good buying from Europe, which has countered waning interest from the Asian region. They expect a fairly firm spot market for the first part of May. 

Spot PP trading was somewhat uninspired. Supplies are much improved, led by several waves of imports. Prices remain pressured and peeled off another penny. Surplus spot supply has been observed, which has mostly been for homopolymer, both prime railcars for domestic delivery and off grade in Houston. The majority of copolymer availability is imported. 

Processors are looking for additional relief aside from the $0.03 to 0.05/lb decrease in April. Monomer has been mostly steady, so perhaps producers will share back a little more of their wide margin.

Read the full Market Update on the PlasticsExchange website.