Spot resin trading remained sporadic last week, with completed volumes falling just short of average and prices on the mixed side, according to the PlasticsExchange (Chicago).
|Image courtesy Cool Design/
Plastics industry participants continued to discuss the potential Chinese tariffs on U.S. polyethylene (PE) and their ramifications. Aside from prime HDPE for blowmold and injection, which has been plentiful, other fresh PE and polypropylene (PP) railcar offers were mostly off grade. Spot resin demand has been coming in spurts—resellers’ inventories are dwindling as buyers, including processors, generally believe that prices are heading lower and are buying minimal quantities as needed or to fill in supply gaps. PE and PP price increases are on the table for April.
While there was a lot of quoting activity involving PE resin, transactions were difficult to complete, reports the PlasticsExchange in its weekly Market Update. Buyers in need of material were willing to pull the trigger, but, otherwise, it appeared like a lot of window shopping. Processors seemed to be testing the market for price in light of proposed tariffs and the pending $0.03/lb increase, which has rolled from April. Export prices in Houston have been coming under pressure to remain competitive on a global basis. Upstream inventories continue to build and it seems like the market might just be running out of steam. Perhaps producers will volunteer a friendly price decrease in early May before meeting up with customers at NPE.
PP trading this past week left something to be desired . . . like better supply and demand, writes the PlasticsExchange. Continued production issues, including two active force majeure situations, have kept spot PP supplies particularly snug. While off-grade prices have been soft, and much of it being exported, finding larger volumes of surplus prime material has been a challenge. Producers will lean on these tight supply/demand conditions as they seek to implement a margin-enhancing increase, ranging between $0.03 and 0.05/lb for April. One lone producer nominated a $0.04/lb increase for May.
Read the full Market Update on the PlasticsExchange website.