Spot resin trading began slowly last week, but picked up some steam as the days wore on. The PlasticsExchange (Chicago) reports in its Market Update that, while its trading desk was busy quoting, deals were sometimes difficult to complete and volumes fell below average.
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Polyethylene (PE) processors seemed content to procure in smaller quantities or just simply sit on the sidelines, rationalizing that lower prices lie ahead. Most grades of PE had at least decent availability with the occasional exception. Though the $0.03/lb PE increase, which had been delayed until April, remains on the table, some producers are now inching toward a possible split implementation for some grades, according to the PlasticsExchange.
The spot polypropylene (PP) market is more balanced, if not tight. Prime material remained relatively scarce, with a smattering of discounted off-grade cars showing up. A margin-expanding PP increase of $0.03 to 0.05/lb is still active for April, which is getting added support by crude oil reaching fresh three-year highs.
On the PE market, deal flow slowed significantly and prices were mostly flat, writes the PlasticsExchange. There was a lack of enthusiasm among spot market participants; fresh railcar offers were sporadic, though discounted, and middle market suppliers have lightened inventories. End users picked away, but felt no urgency to procure more than what was needed.
Low-density and linear low-density PE film grades, which became more available, were the transaction leaders this trading week. High-density PE blowmolding was not too far behind. There was little interest in the injection grades. Despite another attempt to push through the $0.03/lb increase, the consensus seems to be that prices have some downside ahead.
PP trading was also a little slower this past week. Prime PP supplies and prices remain tight and firm, while off-grade was looser and discounted. Although April PGP contracts decreased another cent, PP producers are still trying to implement a net price increase of $0.02 to 0.04/lb for April contracts, according to the PlasticsExchange. Buyers are beginning to recognize the market’s tight supply situation and the possibility that some increase will hold, at least by the end of May.
Read the full Market Update on the PlasticsExchange website.