Weekly resin report: As PE prices started to tick higher, buyers came looking for deals

The spot resin markets began last week with a bang, but the sizzle began to fizzle before another buying surge sent the week stellar, reports the PlasticsExchange (Chicago) in its Market Update.

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Initially, polyethylene (PE) shone brightly, as good domestic demand met diminishing availability and indications that export offers would be bumped up a couple of cents for May. Late in the week, polypropylene (PP) grabbed the spotlight as the PGP monomer rally started to accelerate and then it was scoop city for savvy resin buyers, swiftly snatching up those still special offers.

Spot PE trading activity was very good as April marched on. Completed volumes were a bit above average as buyers, feeling that prices were starting to tick higher, came looking for deals. High-density and linear-low-density PE film resins added a half-cent, while low-density PE for both film and injection and linear low-density PE for injection were all up a full penny. Prompt availability tightened, as resellers’ inventories have thinned and some suppliers withheld offers in anticipation of a better selling environment in May.

April contract prices have rolled flat but with spot firming, it seems as if producers will make a more concerted effort to implement their increase next month, according to the PlasticsExchange. PE exports continued strong, with good interest coming from all major international regions. Exports have now reached 33% of all U.S. PE sales; this trend will continue to grow and remain a very important channel needed to soak up new production that will come online.

PP trading was active—buying was strong as market sentiment turned more bullish on the heels of rapidly rising feedstock costs. Well-priced offers flowed nicely throughout the week and began to look more appealing to buyers that keep a keen eye on spot propylene prices and trends. With this week’s 10% rise in monomer costs, May PGP and PP resin contracts are now poised to jump a nickel or more, reports the PlasticsExchange.

Spot PP prices at the trading desk added a penny on Thursday and Friday for a total of $0.02/lb. In terms of completed volume, demand favored homo-polymer over co-polymer PP, and both resellers and processors were seen as prominent buyers. The PlasticsExchange has been touting the start of a PP uptrend and has recommended a strategic increase to inventory levels. It writes that it has happily followed its own advice and sees additional upside ahead. In the meantime, there are still some relatively good deals that are worth pursuing.

Read the full Market Update on the PlasticsExchange website.

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