TPE resin pricing: PP and PE September contracts remain unsettled; PS balances output with demand

 Volumes were high, and prices were steady to a little firmer on the spot polyethylene (PE) market as participants weighed uncertainty about material deliverability, the state of contract pricing, and material allocations. Spot-trading platform The Plastics Exchange (www.theplasticsexchange.com) and its partner PetroChem Wire (www.petrochemwire.com) report that processors short on inventory have declared force majeure due to material delivery issues stemming from Hurricane Ike’s aftermath. Because of this, processors continue to tap the spot market for short-term supply needs.

High-density polyethylene film, blowmolding, and injection prices were a half cent higher to $0.80/lb, with low-density injection grades up a half cent into the low $0.80’s/lb. Linear low-density traded around $0.80/lb. TPE and the PetroChem Wire explain that some market players feel supply/demand fundamentals have become unclear, noting that producer inventories of PE ballooned in August, but much of the excess was worked off during September as contractual resin sales were filled from these existing stocks. Market-wide price settlements for September contracts have yet to be completed. Some processors told TPE they negotiated a $0.07/lb decrease for contract purchases before Ike swept through the Gulf. However, several producers have issued notices that they will price October contracts with the full $0.18/lb of prices increase previously implemented in 2008.

TPE and the PetroChem wire report that spot polypropylene (PP) was active, and prices eased about $0.01/lb. While many Gulf production facilities were offline due to Ike, supplies were plentiful. Here too, September PP contracts have yet to find market-wide settlement, with some participants expecting contract prices to be sharply lower. TPE says many market participants feel resin prices will resume their downward trek after Gulf production facilities resume full operations. Following the hurricane, domestic railcars of generic prime PP homopolymer jumped back into the lower $0.80’s/lb, with similar quality PP copolymer railcars offered a couple cents/lb higher. Some lower-priced spot deals have also been seen. Offgrade PP railcars have been offered in the $0.70’s/lb, with fresh railcars of export resin priced in the mid and even lower $0.70’s/lb.

The spot polystyrene (PS) market slowed, with very little good color spot material available. That said, a general lack of buying interest kept the market balanced. Occasionally a few railcars have been shown to the market, but more often only off-color material or medium-impact PS. TPE notes that the consolidation of PS producers has limited supplies and could be altering this market away from a commodity type product.