The spot resin markets ended October with a whimper, as activity dried up, offers accumulated and prices slid, reports the PlasticsExchange (Chicago) in its Market Update. But then November came in with a bang. Demand re-awakened and suppliers—some feeling a level of anxiety—were willing to deal on price to unload remaining inventory. As the effects of Hurricane Harvey subside, resin prices have been giving back some of the sharp storm premium that quickly developed. Most PE and PP grades slid back at least another penny this week, with larger losses finally seen in HDPE injection grades, which had earned the largest of premiums.
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Although activity perked up in the spot polyethylene (PE) market following a quiet start to the week, commodity PE pricing stayed soft. Market participants talked prices lower as a result of the onslaught of fresh supplies from new production and the imminent return of the last major PE plant downed by Hurricane Harvey. Reality also set in, however, when purchasers sought certain grades that remained snug for immediate shipment. The PlasticsExchange said it began to see the development of a bifurcated market, with distinctly different pricing for prompt availability versus cheaper levels for shipments two to three weeks out. It will be interesting to see if the extra three-cent contract increase, beyond the $0.07/lb that is firmly in place, will fully take hold marketwide, noted the resin clearinghouse.
With peak pricing behind us, the continued flow of PE import offers seemed out of place. Even though asking prices had dropped to seemingly enticing levels, overseas transit times now present too much risk to procure and import. On the other hand, Houston export prices are still too high to garner demand for large incremental orders, so the import/export markets are in flux. The PlasticsExchange expects Houston prices to drop as upstream supplies build and the target export markets are tapped as originally intended to soak up much of the new PE production.
The polypropylene (PP) market saw several surges of activity last week, although trade was often inconsistent. Prices remain elevated, but overall gave back the penny gained in the previous week. PP contracts were up in October, averaging a two to three cent gain, including the $0.015/lb cost-push bump from monomer. Prime supplies generally remained tight and prices were mostly firm, while off grade availability was better, which led to those prices wavering. The PlasticsExchange reports seeing some sharp discounts for low-end off grade, cheap enough to be sent offshore. That seems to be keeping the market in good balance, at a minimum.
Read the full Market Update on the PlasticsExchange website.