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Prices of 4 out of the 5 commodity resins had been on a downward trajectory heading into December, and polyethylene (PE) resin prices had been moreover reported on that exact same path, as commerce gives had been being reported. Normal, it was a purchaser’s market for all 5 resins with some stocking-up train taking place sooner than yr’s end. That’s in anticipation of complete firmer pricing, along with historic first-quarter worth will enhance for PE and PP. Key components embrace scheduled plant turnarounds, weather-related or completely different world event present disruptions, and the potential for a strike by the Worldwide Longshoremen’s Affiliation (ILA) in opposition to the nation’s East and Gulf Coast ports in mid-January if contract negotiations fail.
These are the views of shopping for consultants from Resin Experience Inc. (RTi); senior analysts from Houston-based PetroChemWire (PCW); CEO Michael Greenberg of The Plastics Change (TPE); Scott Newell, authorities vice chairman polyolefins at distributor/compounder Spartan Polymers; and Mike Burns of Plastic Resin Market Advisors.
PE Prices Flat, Then Down
PE prices in October as quickly as as soon as extra rolled over and — whereas suppliers every lowered their worth enhance nominations from 5¢/lb to a few¢/lb and pushed them as a lot as November — such upward trajectory was unlikely, according to PCW’s affiliate director for PE, PP and PS, David Barry; TPE’s Greenberg; Mike Burns of Plastic Resin Market Advisors; and Kevin Mekaru, RTi’s senior enterprise chief commodity plastics.
Moreover, patrons had been pushing for a decrease. This, after PE prices elevated a whole of 13¢/lb this yr. “Processors are nonetheless steadfast in resisting any enhance for October contracts and are in its place rallying help for an overdue worth drop supported by report upstream resin inventories; the unwinding of the summer time season ethylene rally; lowered export PE prices; and softer spot residence ranges,” TPE’s Greenberg reported.
Virtually all sources anticipated that prices had the potential to drop by 3-5¢/lb throughout the October-November timeframe, bottoming out in December, if suppliers lowered plant working costs. RTi’s Mekaru ventured that PE prices might drop 3¢/lb each in October and November. “Usually, it is a very low-growth environment in the direction of yr’s end, with plenty of spot gives taking place,” Mekaru talked about.
PCW’s Barry well-known that processors are seeing suppliers as very eager to maneuver supplies, and some end-users are saying that PE prices are literally once more to first-quarter 2024 ranges and even lower, with gives being provided. He ventured that PE contract prices not replicate exact prices.
Weighing in, Plastic Resin Market Advisors’ Burns well-known that suppliers need to chop export prices and export as plenty of the quite a few inventory buildup that occurred the two earlier months by early December. He observed processors as being able profit from “this aggressive year-end different to pre-buy inventory and reset the 2025 contract worth.” He moreover cautioned of first-quarter worth will enhance, which over the previous 9 years have averaged 5¢/lb. This, attributable to year-end exports depleting inventories; processors restocking in January; and scheduled ethylene and PE plant turnarounds.
PP Prices Drop, Then Bottom Out?
PP prices dropped 6¢/lb in October, after the September 4¢/lb decrease, consistent with propylene monomer, and there have been expectations for an extra 2-3¢/lb decrease in November, according to PCW’s Barry, Spartan Polymers’ Scott Newell, TPE’s Greenberg and Paul Pavlov, RTi’s vice chairman of PP and polyvinyl chloride (PVC).
Well-known PCW’s Barry, “Demand for PP is additional distressed than that of PE, partially on account of there’s plenty of lower value world PP resin and accomplished objects. North American PP prices have been so dangerous and it slows down PP demand.” He ventured that December prices might very properly be flat, and as well as a time the place processors might refill with lower value resin and in anticipation of firmer prices throughout the first quarter. These sources all concede that propylene monomer prices would bottom out this month and as well as talked about that PP prices often switch up via the primary quarter.
Spartan Polymers’ Newell well-known that propylene monomer prices will “chase” PP demand. “Monomer inventory continues to be a bit tight. I really feel there’s precise potential for processors to see some good gives in December, in anticipation of higher prices.”
TPE’s Greenberg observed the September decrease as too little, noting that U.S. resin product sales stalled as contract patrons pushed off orders into October in anticipation of 1 different decrease. He reported that as October contract negotiations heated up, it seemed to be time “to tear off the Band-Help and implement the whole remaining decrease that is intrinsically apparent given spot propylene monomer ranges.”
RTi’s Pavlov well-known that PP demand complete was glorious as compared with 2023, until prices began to say no in September. These sources cited the strongest markets this yr as these of extruded sheet for thermoformed packaging and some nonpackaging, along with injection molded caps and closures.
Newell well-known that versatile film, considerably BOPP, confirmed a surprising double-digit progress this yr. Earlier years for versatile film have been neutral to unfavorable in relation to demand, he talked about.
PS Prices Down
Polystyrene (PS) prices in October seemed to be on one of the best ways down by 3¢/lb, having rolled over for the sixth consecutive month in September and had potential to drop a bit additional throughout the November-December timeframe, according to PCW’s Barry and RTi’s Pavlov.
Key components included lower benzene and ethylene prices, and supply/demand fundamentals. Pavlov well-known that plant working costs in fourth quarter had been all the way in which all the way down to about 65%. In accordance with Barry, the implied styrene value based mostly totally on a spot parts (30% ethylene, 70% benzene) was down about 4¢/lb over most of October. A trajectory change on this flat-to-down state of affairs cited by every sources was the potential for elevated crude oil prices attributable to world events, which could result in elevated benzene prices.
PVC Prices Down
PVC prices dropped 1-2¢/lb in October, having rolled over in September, no matter suppliers’ failed attempt to cross a 3¢/lb enhance, according to RTi’s Pavlov. He ventured that PVC prices may very well be flat, if not down a bit additional, throughout the November-December interval. He characterised the market as having slowed in every residence and exports demand, along with elevated supplier inventories, with new functionality being launched onstream by Formosa rising residence present. This, after the suppliers cherished an 11% enhance in residence and exports demand inside the primary half of the yr.
Within the meantime, the first listening to of an antitrust class movement go properly with — that alleges quite a lot of PVC pipe producers (along with Westlake Polymers, which makes every resin and pipe) have conspired to artificially inflate, restore or manipulate the worth of accomplished PVC pipes purchased throughout the U.S. — was taking place in late October.
PET Prices Drop
Polyethylene terephthalate (PET) prices dropped by 3¢/lb contained in the September-October timeframe, based mostly totally on lower raw supplies formulation costs, and had been anticipated to drop by one different 2¢/lb throughout the November-December timeframe, according to RTi’s Mekaru. He well-known that paraxylene/terephthalic acid feedstocks had been anticipated to remain flat, and the market has higher than ample present, every in relation to residence manufacturing and well-priced imports, with comparatively delicate demand.