The commodity resin markets were fairly busy as October drew to a close, reports the PlasticsExchange (Chicago) in its weekly Market Update. Demand was stronger during the first half of the month, as processors flocked to the spot market to avoid paying higher contract prices inflated by the September polyethylene (PE) $0.03/lb increase. Demand lost its luster during the second half of the month, as buyers began to consider thinning inventories for their year-end positions.
|Image courtesy Cool Design/|
Spot PE prices were mostly down $0.005/lb last week; the $0.04/lb October increase will be re-attempted this month. Exports continue to grow, soaking up much of the surplus material from the added new production. Spot polypropylene (PP) levels slid a cent, and October contracts were down $0.015 to 0.02/lb. PP exports continue to grow.
Spot PE saw a strong close to October, with the exception of Halloween day, when some participants abandoned trading early. However, once the calendar flipped, the fog seemed to lift as buyers came back to life, welcoming November with a very nice day of deals.
The PlasticsExchange reports that its trading desk was quite busy working opportunities throughout the week. Domestic demand was slightly subpar, so the competition for each order was tough. The off-grade domestic railcar market has also cleaned up somewhat—low-ball bids received scant attention and those buyers that had a pressing need paid up. Most generic prime commodity grades were amply supplied, especially provided a two-week lead time. Prime prices at the PlasticsExchange trading desk were mostly a half-cent lower last week, causing some price consolidation as the gap between off grade and prime narrowed. The $0.04/lb price increase nomination for October has been rolled to November, but it has not really been attempted. The export market remains active and healthy, as both prime and off-grade materials continue to find happy homes abroad.
Polypropylene (PP) trading wasn’t great but it was good enough. Processors were more prevalent buyers than resellers, volumes continue to favor co-polymer over homo-polymer PP, and prices dropped a penny. There was a regular flow of fresh railcars and good co-polymer PP was quickly scooped up, while rougher off-grade offers languished. Homo-polymer PP availability was only moderate and volumes were evenly split between prime and off grade. The import arbitrage is mostly closed; except for contracted imported supply, there have been few speculative buys. Consequently, very little imported material is available on the market. October contracts were down $0.015 to 0.02/lb; at the moment, the PlasticsExchange does not see a big price change coming in November.
Read the full Market Update on the PlasticsExchange website.