TPE resin pricing: PE, PP, and PS all higher

Limited offerings and rising feedstocks pushed the spot polyethylene (PE) market higher again, with spot prices up $0.03/lb through the first half of June, according to Michael Greenberg, CEO of resin-trading platform, The Plastics Exchange (TPE; http://www.theplasticsexchange.com). Producers have nominated a $0.05/lb increase for June contract prices, with $0.11/lb already added to PE contracts in the second quarter. A weak dollar and North American monomer cost advantage continue to make PE exports desirable overseas, which has helped producers keep domestic inventories tight. The PetroChem Wire (http://www.PetroChemWire.com) reported that spot ethylene gained another $0.02/lb last week, with most producers seeking contract price increases of $.05/lb, bringing the June NTP above $0.70/lb.

Polypropylene (PP) gained on the spot market as well, with lots of buyers and tight supplies. Greenberg reports that one producer put customers on an 85% allocation for June and July, and another told its customers that while not declaring force majeure, the condition currently exists due to operating problems they face in the Gulf. Monomer supply is scarce, pushing propylene to historic highs with no end in sight. The PetroChem Wire reported that spot refinery grade propylene (RGP) gained $0.03/lb this week, while spot polymer-grade propylene (PGP) traded higher than its contract levels. Steam crackers continue to prefer ethane, which is exacerbating the propylene supply crisis. PGP monomer contracts are not yet fully settled for June, with suppliers abandoning their initial request for a $0.06/lb increase, in favor of a full $0.08/lb nomination. Greenberg said this unrelenting pressure has forced many producers to cut production rates back and lift resin prices to stay ahead of costs. Unlike their PE producing counterparts, Greenberg says PP suppliers do not have a meaningful feedstock cost advantage, since most of their feedstocks come from crude-derived naphtha. The domestic PP market remains tight and TPE expects June contract prices to rise sharply as producers pursue increases of $0.06-$0.08/lb.

Spot polystyrene (PS) prices continue to rise amid higher costs and tight supplies, with market-wide acceptance for price increases at $.04/lb for general purpose and $0.06/lb for high impact likely. July increases have already been issued at $0.03/lb for general purpose and $0.04/lb for high impact. Greenberg says that although spot inquiries persist, there is little PS to sell. The result is few offers have been seen, but bids have consistently kept values well into the $0.80’s/lb. PS truckload sales are now in the $0.90’s/lb range with $1 PS not beyond the realm of possibility. According to The PetroChem Wire, spot benzene has been volatile in June, falling $0.12/gal one day and gaining $0.15/gal the next. In spite of these swings, prices have remained above $4/gal.