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

PolyOne says new Shanghai center will ease collaboration across segments

April 24, 2014 2:34 pm ET

PolyOne Specialty Engineered Materials is opening an innovation Center in Shanghai's Jinqiao development zone that will serve as its new Asia Pacific ...    More

Biopolymer firms report success with PHA pilot production

April 24, 2014 1:30 pm ET

Biopolymer developer Meridian Inc. and Tate & Lyle plc have reported successful pilot production of Meridian's process to make polyhydroxyalkanoate,...    More

Songwon acquires division of India's SeQuent

April 24, 2014 12:22 pm ET

Songwon Industrial Group of South Korea has signed a deal with SeQuent Scientific Limited, India to acquire SeQuent's specialty chemicals business.    More

Image

Performance Plastics unit helps lead to increase in sales for Dow Chemical

April 24, 2014 9:57 am ET

Dow reported turnover of $14.5 billion April 23, including an adjusted 6 percent increase in sales at its performance plastics operation, which it...    More

Image

Milliken expanding SC plant for additional PP clarifying agent capacity

April 23, 2014 3:42 pm ET

American chemical company Milliken & Co. has announced plans for a major expansion in capacity for its Millad NX8000 clarifying agent for polypropylen...    More

Market Reports

Market Data Book - Rankings & Lists

A one-stop download of Plastic News' exclusive annual lists and processor rankings containing essential data including sales, employees, end markets, materials and more.
EXCLUSIVE EXCEL FEATURE: full mailing address details for available plant locations.

Learn more

Thermoformed Packaging 2014 Market Review & Outlook North America

This in-depth report provides analysis and discussions of economic and political conditions, market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as strategies being implemented by thermoformed packaging companies. In addition, there are reviews of 25 leading thermoformers in the packaging segment, assessing their growth initiatives and performance metrics over 10 years.

Learn more

Mold Making and Tooling Review and Outlook 2014 North America

This report provides in-depth analysis of the mold and toolmaking market for North America, including discussions of trends, opportunities, threats, the latest developments in production and labor and equipment trends impacting moldmakers.

Learn more

Upcoming Plastics News Events

May 6, 2014 - May 8, 2014Plastics in Medical Devices 2014

May 12, 2014 - May 12, 2014Plastics News Brazil Pharma Summit

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

February 3, 2015 - February 7, 2015Plastics News Executive Forum 2015

More Events