Commodity resin trading improved again last week compared to the dismal start to the month, but overall volumes still tallied the lowest of 2019, reports the PlasticsExchange (Chicago) in its Market Update. The volumes were still above November and December levels, however.
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Most polyethylene (PE) prices slid another penny while polypropylene (PP) shaved a half-cent. Spot processor demand was still slow and some resellers were seen liquidating some positions as the first half of the year came to an end. Buyers had backed away early in the month, as energy and feedstock costs came under significant pressure. PE contracts did not implement the $0.03/lb increase that was on the table, and there is a chance that a late decrease might actually come through. PP resin contracts followed PGP monomer costs down $0.035/lb, but the rebounding monomer market is already pointing to a small gain for July. It should be noted that it is still very early and plenty can change. Incremental export sales were still off their rapid pace, but direct producer sales seemed to remain robust. All in all it was an excellent first half of 2019, writes the PlasticsExchange.
The spot PE market ended June and the first half of the year somewhat sluggish, a contrast with the first five months. Although this past week’s results were better than they had been during the first part of the month, a full-flung flurry failed to develop. As a whole, June was the lightest trading month of the year, as negative sentiment slowed processor purchases, which weighed on prices. Spot PE levels were down a penny across the board as buyers, some reporting slower throughput, again chose to work down inventories in hopes of lower prices ahead. While producers sought a $0.03/lb increase for June, which did not implement and was rolled to July, final June contracts still remain a bit cloudy as a major consultancy estimated the market down $0.03/lb; it has not been confirmed that producers will acquiesce as they seem to be holding pricing flat, said the PlasticsExchange. PE inventories in other regions appear to be swelling, and despite WTI oil trading back near $60/bbl, weak international resin prices continue to pressure export levels.
Spot PP trading managed to achieve average results this past week. There was a good, sometimes heavy, flow of railcar offers as some resellers looked to move material at a discount rather than add unsold resin to their inventories. Buyers did pick away with orders—some very sharp deals were available—but ample supplies remained as the week came to a close, according to the PlasticsExchange. Decent demand came from Mexico, but incremental exports otherwise were challenged by price and interest. Another half-cent ticked off homo-polymer and co-polymer PP levels, which caught up (or down) to the June contract decrease. The PP market can be known for turning in a heartbeat, so with upstream resin inventories at historic lows and PGP bouncing a bit from the June slide, the PlasticsExchange advises maintaining comfortable resin stocks on hand.
Read the full Market Update on the PlasticsExchange website.