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Weekly resin report: Persistent demand for LD and LLD PE sends up prices

Article-Weekly resin report: Persistent demand for LD and LLD PE sends up prices

Weekly resin report: Persistent demand for LD and LLD PE sends up prices
Continued strong demand for low-density (LD) and linear-low-density (LLD) polyethylene (PE) resins raised prices by $0.01 to 0.02/lb last week, reports the PlasticsExchange (Chicago). High-density PE prices held flat.

During a very busy trading week, the flow of fresh railcar offers remained a tad on the light side, consistent with the weeks since the early December purge, reports the PlasticsExchange (Chicago) in its Market Update. Nevertheless, enough material was available to satisfy strong customer demand. Despite all upstream costs falling the week of Jan. 20, spot polyethylene (PE) prices were at a minimum fully steady to up $0.02/lb, while polypropylene (PP) prices gained an early cent and then relinquished it by the weekend.

Cool Design
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This week’s completed deals were almost evenly split between domestic and export as well as PE vs. PP: Prime resin sold more than off grade, railcar volumes exceeded truckloads, resellers were larger buyers than processors and prompt shipments surpassed forward sales.

Spot PE trading remained very active, with continued strong demand for low-density (LD) and linear-low-density (LLD) PE resins sending these material groups $0.01 to 0.02/lb higher. High-density PE prices held flat. Prompt availability of LDPE film grades was still scarce and incoming supply was quickly scooped up, writes the PlasticsExchange, while excess demand persisted into late Friday. Similar activity was observed for high-flow LLDPE injection grades, both pellet and granular. A $0.04/lb price increase is nominated for January PE contracts, with some tacking on another nickel for February; however, at least one major consultancy has estimated PE prices flat for January, and some market participants see the possibility of a revision, according to the PlasticsExchange.

The PP market saw a strong surge of buying activity last week. Exporters were large buyers of Prime homo-polymer, while domestic processors mostly procured Prime and off-grade co-polymer resins. While upstream resin supplies remain tight, the PlasticsExchange notes that it managed to complete the majority of its orders. The low side of the pricing spectrum has lifted, though very favorable pricing could still be found. Export demand is trending upwards and growing offshore shipments may be keeping domestic supplies snug. PP contracts should be steady to perhaps a penny lower; PlasticsExchange analysts see limited downside risk from these levels.

Read the full Market Update on the PlasticsExchange website.

TAGS: Materials
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