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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 presents had been being reported. Whole, it was a purchaser’s market for all 5 resins with some stocking-up train occurring sooner than 12 months’s end. That’s in anticipation of normal firmer pricing, along with historic first-quarter worth will improve for PE and PP. Key parts embrace scheduled plant turnarounds, weather-related or completely different worldwide event present disruptions, and the potential for a strike by the Worldwide Longshoremen’s Affiliation (ILA) in the direction of 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 Know-how Inc. (RTi); senior analysts from Houston-based PetroChemWire (PCW); CEO Michael Greenberg of The Plastics Commerce (TPE); Scott Newell, govt vp 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 decreased their worth improve nominations from 5¢/lb to a few¢/lb and pushed them as a lot as November — such upward trajectory was unlikely, in accordance with 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 an entire of 13¢/lb this 12 months. “Processors are nonetheless steadfast in resisting any improve for October contracts and are in its place rallying assist for an overdue worth drop supported by report upstream resin inventories; the unwinding of the summer season ethylene rally; decreased 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 inside the October-November timeframe, bottoming out in December, if suppliers lowered plant working costs. RTi’s Mekaru ventured that PE prices could drop 3¢/lb each in October and November. “On the entire, it is a very low-growth setting in the direction of 12 months’s end, with numerous spot presents occurring,” 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 presents being supplied. 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 numerous the quite a few inventory buildup that occurred the two earlier months by early December. He seen processors as being able benefit from “this aggressive year-end different to pre-buy inventory and reset the 2025 contract worth.” He moreover cautioned of first-quarter worth will improve, which over the past 9 years have averaged 5¢/lb. This, on account of 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, in line with propylene monomer, and there have been expectations for an extra 2-3¢/lb decrease in November, in accordance with PCW’s Barry, Spartan Polymers’ Scott Newell, TPE’s Greenberg and Paul Pavlov, RTi’s vp of PP and polyvinyl chloride (PVC).
Well-known PCW’s Barry, “Demand for PP is further distressed than that of PE, partially on account of there could also be numerous lower worth worldwide PP resin and accomplished gadgets. North American PP prices have been so unstable and it slows down PP demand.” He ventured that December prices could be flat, and as well as a time the place processors may replenish with lower worth resin and in anticipation of firmer prices inside 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 typically switch up by the primary quarter.
Spartan Polymers’ Newell well-known that propylene monomer prices will “chase” PP demand. “Monomer inventory stays to be just a bit tight. I consider there could also be precise potential for processors to see some good presents in December, in anticipation of higher prices.”
TPE’s Greenberg seen 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 appeared 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 normal was excellent as compared with 2023, until prices began to say no in September. These sources cited the strongest markets this 12 months as these of extruded sheet for thermoformed packaging and some nonpackaging, along with injection molded caps and closures.
Newell well-known that versatile film, notably BOPP, confirmed a stunning double-digit progress this 12 months. Earlier years for versatile film have been neutral to harmful with regards to demand, he talked about.
PS Prices Down
Polystyrene (PS) prices in October appeared to be on the easiest way down by 3¢/lb, having rolled over for the sixth consecutive month in September and had potential to drop a bit further inside the November-December timeframe, in accordance with PCW’s Barry and RTi’s Pavlov.
Key parts included lower benzene and ethylene prices, and supply/demand fundamentals. Pavlov well-known that plant working costs in fourth quarter had been all the best way all the way down to about 65%. In accordance with Barry, the implied styrene worth based totally on a spot system (30% ethylene, 70% benzene) was down about 4¢/lb over most of October. A trajectory change on this flat-to-down scenario cited by every sources was the potential for elevated crude oil prices on account of worldwide events, which could finish 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 transfer a 3¢/lb improve, in accordance with RTi’s Pavlov. He ventured that PVC prices may very well be flat, if not down a bit further, inside 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% improve in residence and exports demand inside the primary half of the 12 months.
Within the meantime, the first listening to of an antitrust class movement swimsuit — that alleges a variety of PVC pipe producers (along with Westlake Polymers, which makes every resin and pipe) have conspired to artificially inflate, restore or manipulate the price of accomplished PVC pipes supplied inside the U.S. — was occurring in late October.
PET Prices Drop
Polyethylene terephthalate (PET) prices dropped by 3¢/lb contained in the September-October timeframe, based totally on lower raw supplies formulation costs, and had been anticipated to drop by one different 2¢/lb inside the November-December timeframe, in accordance with 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 with regards to residence manufacturing and well-priced imports, with comparatively light demand.