Spot resin trading continued to improve and became busier as the week of July 8 wore on. Most spot polyethylene (PE) prices slipped another cent, continuing to track its long-term downward trend; polypropylene (PP) prices edged a half-cent higher, as PGP monomer rose further, and contracts appear poised to reverse the June decrease, reports the PlasticsExchange (Chicago) in its Market Update.
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Buying activity really heated up on Friday, as slow-moving Tropical Storm Barry gained strength over the warm Gulf waters, threatening key petrochemical infrastructures that triggered some precautionary facility closures. As a result, energy and feedstock prices rallied and some processors procured additional resin as back-up supply. The added boost in demand reversed the trend of below-average trading results and lifted completed volumes to excellent levels, said the PlasticsExchange.
The spot PE trading slumber is over—the markets became busy and completed volumes tallied above average. In general, processors were in the market to restock, while some also ordered extra ahead of the storm moving through the Gulf. Despite the healthy trading volumes, most commodity-grade PE prices still fell another penny, though low-density PE film and low-density and linear-low-density PE for injection stayed steady.
Asian PE prices have been recovering the last couple of weeks and have been providing better incremental export demand at and just below prevailing Houston offers. June PE contracts seem to have mostly rolled steady, though some processors might have taken a decrease or received a volume rebate. To help add to pricing confusion, there is a $0.03/lb increase on the table for July PE contracts; however, spot prices have continued to slide and the market is perhaps setting up for a July decrease to balance those that did not receive relief in June, according to the PlasticsExchange.
PP trading picked up during the second week of July. Completed volumes through the PlasticsExchange were above average and prices gained a half-cent. Both processors and other resellers were active buyers in the spot market; some came to restock as a normal course of business, but order sizes were generally large, perhaps influenced by the recent strength in PGP or worries about possible supply disruptions due to Tropical Storm Barry. Overall supplies remain average to ample and there are still some excellent deals to be had, particularly for off-grade material. July PP contracts will follow monomer contracts higher, both of which appear ready to at least reverse the $0.035/lb decrease that came through in June. The PlasticsExchange said that its market outlook remains neutral to slightly bullish.
Read the full Market Update on the PlasticsExchange website.