Weekly resin report: Spot and contract resin prices rising across the board

Prices for both polyethylene (PE) and polypropylene (PP) firmed at least a penny last week, with some extra strength seen in low-density (LD) PE for film. Buyers sought to procure well-priced material in the face of a burgeoning bull run and were more aggressive than sellers, who generally sat back awaiting orders after raising prices about $0.02/lb to start the month of May, reports the PlasticsExchange (Chicago) in its Market Update.

Cool Design
Image courtesy Cool Design/
freedigitalphotos.net.

The market was shocked by a major consultancy assessing April PE contracts up $0.03/lb rather than flat. This surely made producers smile, but for processors that bought resin a month ago thinking it was priced flat, well, not so much! The export market paused a tad as oil eased, but the overall trend is for continued growth in offshore resin sales.

Spot PE trading ended April with a flurry, as still-rising prices sent buyers to procure in a hurry. PE prices rose $0.01/lb across the board, except for LDPE for film, which gained an extra half-cent. It is typical to see this premium expand in rising markets.

Most market participants expected April PE contracts to roll flat, according to the PlasticsExchange, but a major consultancy assessed April contracts up $0.03/lb, adding a level of confusion to PE pricing. We had already turned bullish on PE, noted the PlasticsExchange in its weekly report, “so while we think that the current pricing action is awkward, we have nothing to complain about.” It now seems that April contracts could very well be confirmed up $0.03/lb and there is another $0.03/lb increase on the table for May, which will make for some interesting producer-processor conversations.

On the spot PP market front, processors who thought that the bear market would never end have been scrambling to buy resin, as soaring feedstock costs point to a sizable cost-push price increase for May PP contracts. Sentiment has turned outright bullish and changed the pricing power dynamic: Buyers previously were in control, but negotiating strength has now fallen into sellers’ hands.

Spot PP resin added another cent, bringing the two-week total to $0.03/lb and raising the PlasticsExchange benchmark homo-polymer PP contract to $0.57/lb, having risen a sharp $0.04/lb in the past month. The jump in PP prices should come as no surprise: The PlasticsExchange had pegged the market hitting bottom some six weeks ago and has been advocating for more aggressive buying. May PP contracts are expected to jump at least a nickel and perhaps as much as $0.07/lb or more, if the monomer run continues.

Read the full Market Update on the PlasticsExchange website.

PT Newsletter Graphic with Digital News Final

Comments (0)

Please log in or to post comments.
  • Oldest First
  • Newest First
Loading Comments...