The spot resin markets quieted down last week, with prices mixed and average volumes changing hands, reports the PlasticsExchange (Chicago) in its Market Update. Completed volumes were nearly split evenly between polyethylene (PE) and polypropylene (PP). In a minor reverse of trend, PE prices all dropped $0.005/lb, while PP prices finally saw an uptick, though only that same half-cent. Export demand continued to drive incremental sales, and last week, PP joined the party. Despite a (weak) price increase effort, PE contracts are rolling flat, as expected, and March PP contracts are expected to confirm a decrease of around $0.03/lb.
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PE trading again was spotty, and it was either feast or famine throughout the week. The market was mostly considered slow, writes the PlasticsExchange, and only a late surge of activity brought completed volumes up to average. Offers were a bit thinner than during most of the first quarter, but suppliers were still willing to deal on price. Transactions were completed at slightly lower levels, which contributed to prices slipping a half-cent across the board. However, processors have started to report that customer orders are starting to spring up, which brought better buying toward the end of the week.
March PE contracts have rolled flat, despite an average $0.03/lb increase, which was on the table this month. As predicted by the PlasticsExchange, the increase really had no chance. Producers might see flat pricing as a win, since they managed to hold official contract prices steady in the face of falling feedstock costs and growing resin supplies. Yet more resin will certainly come to market as new production ramps up. Another contract price decrease would actually make sense to help close the gap that expensive contracts hold to discounted spot material, according to the PlasticsExchange. In the meantime, PE exports are still very active and will continue to grow and soak up much of the added production, as intended.
PP trading was much improved this past week. A good flow of offers matched up well against solid spot demand. Processors seem to recognize strong value at these price levels—they fished for stellar deals and were willing to pay up slightly for additional material. Homo- and co-polymer PP prices increased by $0.005/lb, the first uptick recorded by the PlasticExchange since early October. Most domestic transactions favored homo- and co-polymer PP, and good demand also came from south of the border.
The best PP opportunities remain in the spot railcar market, with nary a decent discount for Houston/export orders. Resellers seem to have relatively little PP on hand and command a nice premium for a single packaged truckload. The PlasticsExchange expects March PP contracts to decrease about $0.03/lb and continue to take direction from the monomer market, which is currently pointing slightly higher for April and beyond. The PP resin market is actually fairly balanced and could potentially support a margin increase ahead.
Read the full Market Update on the PlasticsExchange website.