Trading activity did not set off any fireworks, perhaps, but the spot resin markets began July moderately busy. A nice flow of processor buy orders came in through mid-week, reflecting some seemingly pent-up demand at the start of the third quarter, reports the PlasticsExchange (Chicago) in its Market Update.
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Though the supply of fresh railcars was light, some cars sold and ample packaged material was offered by resellers to provide good market liquidity. Consequently, most realistic deals came to completion with relative ease. The market then fell silent on Thursday, as the United States celebrated Independence Day.
Spot polyethylene (PE) trading perked up a bit last week. In fact, it was better than anticipated, considering the holiday-shortened week, writes the PlasticsExchange. Spot PE prices, which had been sliding, held firm as July began. There is still a high level of uncertainly regarding June contracts—some claim a $0.03/lb decrease is at hand, while others see flat times ahead. No sensible soul sees the nominated $0.03/lb increase coming to fruition.
Indeed there were some extra special sharp deals available as Q2 came to an end, but the market will have a fresh reboot when participants return after a four-day holiday weekend. While incremental export sales have been challenged recently by negative sentiment and sluggish demand, much of the lauded new production has been consistently placed offshore. This trend should continue to grow to provide underlying support to the U.S. domestic market.
Spot polypropylene (PP) trading shone brightly as July began, with a number of deals being made and prices edging a half-cent higher. Volatile upstream monomer costs have kept market participants on their toes, swinging monthly contracts both up and down. Right after the recent June $0.035/lb decrease, PP resin prices, coat-tailing PGP monomer costs, seem to be pointing back higher for July in another quick reversal, according to the PlasticsExchange.
The spot market does not feel extremely tight and most materials can be found, especially at the right price; however, upstream PP inventories are actually the lowest since the PlasticsExchange began keeping records almost 15 years ago. PP exports have been moving out at a healthy clip, soaking up mostly low-end material and also some Prime traveling to Latin American destinations. With the recent PGP move higher and other listed factors, the PlasticsExchange figures that trading activity is, at a minimum, neutral and leaning toward a slightly bullish tone.
Read the full Market Update on the PlasticsExchange website.