North American prices fall for PE, PP, PVC and PET

By Frank Esposito
Senior Staff Reporter

Published: June 28, 2012 6:00 am ET

Related to this story

Topics Materials, Suppliers

AKRON, OHIO (June 28, 2:50 p.m. ET) — The slippery slide of the commodity world sent average North American prices for several resins down once again in June.

Since June 1, average prices for all grades of polyethylene in the region have fallen 7 cents per pound, while average polypropylene prices have plummeted 15 cents per pound. In that same time frame, average prices for suspension PVC and PET bottle resin each are down 5 cents per pound, according to buyers and market sources contacted by Plastics News.

Prices for each of those materials had slipped in May as well. Early-year price gains now have been erased for all of them.

Sources and market watchers cited declining feedstock costs and lethargic consumer demand as reasons for the second straight month of price declines.

The PE move was the second 7-cent drop in as many months. “Ethane and ethylene [feedstocks] are falling, but they may have hit bottom,” said Mike Burns, a PE market analyst With Resin Technology Inc. in Fort Worth, Texas. “If prices stay the same in July, they could be flat for August as well.”

U.S./Canadian demand has not done much to support market pricing. Through April, regional high density PE sales were down almost four percent, with low density PE sales down about 5 percent and linear low density PE sales off just over 6 percent, according to the American Chemistry Council in Washington.

PE buyers “now are just buying as needed,” Burns added. “They’ve got no incentive to buy more, because prices are decreasing.”

Burns also said that he doubted that lower prices could do much to help North American PE makers to sell their materials elsewhere, since PE from other global regions now are competing for that same business as well. Through April, U.S./Canadian PE exports were down almost 24 percent, with LLDPE exports down 19 percent and LDPE exports slipping more than 5 percent.

The latest PP drop is another in a series of dizzying moves to befall that market in the last two years. Regional prices had climbed 22 cents per pound in the first four months of 2012, but now have zoomed down 25 cents since May.

PP pricing “is a case of live by the sword, die by the sword,” said Phil Karig, owner of the Mathelin Bay Associates LLC consulting firm in St. Louis. “Or, more specifically, polypropylene prices following oil prices up, then following them down and then starting the cycle all over again.”

Crude oil prices were near $78.50 in early trading June 28. Prices for that key feedstock have slipped almost 14 percent in the last month – and are way off of their $100-plus highs reached earlier this year.

But Karig added that PP buyers “shouldn't get too comfortable with the latest [price] drop…because the pricing roller coaster will start climbing again as soon as oil prices blip up again.”

Through April, North American PP demand basically was flat, according to ACC, with a 2 percent domestic sales gain being wiped out by a plunge of almost 32 percent in export sales.

PVC prices fell 5 cents in June after slipping down 2 in May. U.S./Canadian sales were surprisingly strong – up 4 percent through April – in spite of the sales drop. Domestic PVC sales were up 9 percent in that period, indicating that the region’s construction market – PVC’s main end market – may be recovering.

One PVC market watcher said that the big unknown for the market moving forward is whether buyers in its dominant pipe end market are holding resin orders as they wait for prices to come down further, or if they’ve already completed some of their usual summer work because of mild winter weather seen in much of the U.S.

In PET, prices now have slid for three consecutive months, although the 5-cent June drop is larger than the combined 4-cent drop of April and May. Lackluster demand for carbonated soft drinks – PET’s biggest end market – was cited as a reason for the decline, as more consumers move toward healthier options such as bottled water, sports drinks or juices.

Contract prices for paraxylene feedstock fell in June, and prices for ethylene glycol feedstock were expected to fall as well, one industry contact said. “Demand [for PET] is still very soft,” he added. “A lot depends on crude oil at this point.”

Through June, regional PE prices now are down an average of 9 percent, according to the Plastics News resin pricing chart. In that same period, PET prices are down 5 percent and prices of PP and PVC each are down 3 percent.


Comments

North American prices fall for PE, PP, PVC and PET

By Frank Esposito
Senior Staff Reporter

Published: June 28, 2012 6:00 am ET

Post Your Comments


Back to story


More stories

Image

Blow molding machinery maker opens first plant in Taiwan

October 1, 2014 1:27 pm ET

Taiwanese equipment maker Kin Precision Industry Co. Ltd. has opened a 2,000-square-meter, 25-employee factory in Taichung, Taiwan, with an eye to...    More

Image

Global Plastics Summit puts PE prices in the spotlight

October 1, 2014 3:17 pm ET

Product manufacturers may start to shift away from polyethylene because of high prices, according to two major plastics processors.    More

Image

Speaker: Many issues can affect multi-cavity molds

October 1, 2014 2:02 pm ET

There are several conditions necessary across all cavities of a multi-cavity mold to ensure that all parts are produced the same. These include...    More

Image

Nucleation offers solution to shrinkage in HDPE closures

October 1, 2014 1:57 pm ET

For caps producers, nucleation can provide a practical solution to eliminate shrinkage variations in high density polyethylene beverage closures....    More

Image

Dow loses appeal in price fixing case

October 1, 2014 11:10 am ET

The Reuters press agency reports that a federal appeals court in Denver has rejected Dow Chemical Co.'s attempt to overturn a $1.06 billion fine impos...    More

Market Reports

Plastics in Mexico - State of the Industry Report

This report analyzes the $20 million dollar plastics industry in Mexico including sales of machinery & equipment, resins and finished products.

Our industry analysis highlights macro industry trends and micro trends faced by companies that do business in Mexico. The report also provides key industry statistics and forecasts to anticipate future industry expansion.

Learn more

Plastics Caps & Closures Market Report

The annual recap of top trends and future outlook for the plastics caps & closures market features interviews with industry thought leaders and Bill Wood’s economic forecast of trends in growing end markets. You will also gain insight on trends in caps design, materials, machinery, molds & tooling and reviews of mergers & acquisitions.

Learn more

Injection Molders Market Report & Ranking 2014

This special package contains our 132-page 2014 Market Report on the Injection Molding segment and our exclusive 2014 RANKINGS database of 500+ Injection Molders for a discounted package price.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

More Events