PET prices up 4, PP down 1

By Frank Esposito
Senior Staff Reporter

Published: November 27, 2013 3:33 pm ET
Updated: November 27, 2013 3:37 pm ET

Image By: Plastics News file photo

Related to this story

Topics Materials, Resin Pricing

Feedstock-related issues have moved North American prices for PET bottle resin up a net of 4 cents per pound in recent months, while regional prices for polypropylene resin fell 1 cent per pound in November.

The PET move came as increases for August and September were weathered by a drop in October. Market sources said changes in price for paraxylene and purified terephthalic acid feedstock affected regional PET prices, as demand remained relatively flat to up 1-2 percent at most. Profit margins at regional PET-making firms also weren't boosted very much by the August-September price hikes, sources said.

Even after the net 4-cent increase, regional PET prices remain down a net of 2 cents per pound so far in 2013, according to the Plastics News resin pricing chart. Buyers said further price decreases could hit the market in November as seasonal demand slows. Ongoing lightweighting of PET carbonated soft drink and water bottles also continues to affect North American resin demand.

The major capacity news hitting the North American PET sector in the first half of 2013 was DAK America's mid-June announcement that the firm would close its plant in Wilmington, N.C., by September. The plant — known as the Cape Fear plant — employs 600 and has annual PET capacity of 440 million pounds. Earlier this year, DAK's parent firm — Alpex SAB de CV of Monterrey, Mexico — bought the rights to 900 million pounds of new PET capacity at a plant that M&G Group will open in Corpus Christi, Texas, in 2016.

By 2018, North American PET makers will add about 3.5 billion pounds of capacity to a North American market that currently operates about 8.4 billion pounds. Industry analyst Chase Willett recently said that more rationalization of older capacity is expected, but flat domestic demand growth means that the new PET capacity will serve to reduce the amount of resin imported into North America. Almost every global region is oversupplied with PET, leading to global operating rates in the 60s, said Willett, who's with IHS Chemical in Houston.

The 1-cent November slide for PP is the second consecutive monthly decline, following a 2-cent drop in October. Regional PP prices now are down a net of 7 cents per pound so far in 2013.

Sources said the November drop was tied to a decline in price for polymer-grade propylene monomer, as well as soft seasonal demand. One industry contact said the November decline was expected to be in the 2-4 cent range until spot prices rallied late in the month, limiting the slide to 1 cent.

PP's broad range of uses in commercial and industrial products was lifted earlier in the year as U.S. gross domestic product growth improved to around 2.5 percent and the U.S. unemployment rate fell to almost 7 percent. That rate had been as high as 7.9 percent in February.

North American PP makers are expected to add almost 9 billion pounds of propylene production from 2013-18 — an increase of about 23 percent. Most of that new capacity will come via "on-purpose" PDH (propane dehydrogenation) methods, according to IHS market analyst Joel Morales. Excess propane from shale is driving new investments, Morales said recently. However, he added, PP price volatility will be here until that new propylene capacity comes on in 2015.


Comments

PET prices up 4, PP down 1

By Frank Esposito
Senior Staff Reporter

Published: November 27, 2013 3:33 pm ET
Updated: November 27, 2013 3:37 pm ET

Post Your Comments


Back to story


More stories

Image

Producers urge booming Brazilian housing market to use EPS

April 18, 2014 1:08 pm ET

Leaders in Brazil's plastics industry are asking lawmakers to mandate the use of expandable polystyrene (the raw material for expanded EPS) in new...    More

Image

'Thermoforming has nearly limitless possibilities'

April 18, 2014 12:54 pm ET

Julie McAlindon of PolyOne Corp. speaks about the future of thermoforming and the integration of Spartech Corp.    More

Image

Ascend targets nylon for auto applications, opening propylene monomer unit in Texas

April 18, 2014 10:57 am ET

Materials firm Ascend Performance Materials Inc. is in full operation at its new nylon 6/6 compounding line in Florida and will break ground by the...    More

Dutch company launching $100 million PP, PE recycling plant

April 18, 2014 10:42 am ET

Quality Circular Polymers is building a new plastics recycling operation in Geleen, the Netherlands' Chemelot industrial chemical site, with a...    More

Lumena suspends trading, delays report amid claims of 'misrepresenting' financials

April 18, 2014 10:19 am ET

China Lumena New Materials Corp., which says it has the world's largest manufacturing capacity for polyphenylene sulfide resin, has suspended its stoc...    More

Market Reports

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

Automotive Market Review and Outlook 2014 The Americas

This 75-page report features in-depth analysis of the automotive industry for the Americas. It includes discussions of market trends, legislative/regulatory activity impacting production and threats as well as design strategies being implemented by the major automakers. Detailed charts and data tables outline North American automotive production over the last five years.

Learn more

Plastics Building & Construction Market Review and Outlook 2014 with MS Excel chart data

This report provides in-depth analysis of the plastic building and construction market for North America, including discussions of trends, opportunities, threats and the latest developments in construction trends that impact plastics processors.

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