PP prices continue trend, fall 3 cents

By Frank Esposito
Senior Staff Reporter

Published: June 19, 2014 4:09 pm ET
Updated: June 19, 2014 4:27 pm ET

Related to this story

Topics Materials, Materials Suppliers, Resin Pricing

North American polypropylene resin prices have tumbled an average of 3 cents per pound since June 1, following a downward trend in price for propylene monomer.

It’s the fifth straight month that regional prices for the material have fallen. The previous four price declines had totaled an average of 4 cents per pound. Those declines followed a 5-cent hike that took hold in January.

The June drop again came as a bit of a surprise, since PP demand has been improving in recent months. North American PP sales for 2014 are up more than 2 percent through April vs. the year-ago period. And expectations are that May sales totals for the region will be up about 5 percent vs. April.

A buyer in the U.S. Midwest said that PP sales have remained strong through June, but he added that downward pressure on propylene monomer has buyers expecting another possible PP price decline in July.

Inventory levels don’t appear to have had much effect on PP pricing so far in 2014. Prices fell in April even though inventories tightened by more than 1 percent.

Domestic PP sales in April were flat vs. the same month in 2013, according to the American Chemistry Council in Washington. In spite of being flat overall, domestic sales of PP into sheet applications jumped more than 19 percent month-vs.-month. Sales of the material to compounders also bumped up almost 14 percent for the month. But those moves were canceled out by a surprising sales drop of 16 percent for sales of PP into injection molded rigid packaging, including cups, containers, caps and closures.

North American PP gains through April included a 1.6 percent increase in domestic sales and a gain of more than 25 percent in export sales.

In a recent interview, PP market analyst Scott Newell said that the 2014 North American PP market has been affected by pre-buying done by processors in late 2013, and by a lack of unexpected outages in propylene production. Pre-buying was done as buyers expected early-year price hikes as seen in recent years. As a result, Newell said, regional PP processors have been able to work off existing inventory without needing to buy more.

“It wasn’t a huge pre-buy but it definitely took place,” said Newell, who is with Resin Technology Inc. in Fort Worth, Texas.

The lack of unplanned propylene outages also meant that more material was available for PP production. Prices have been soft as a result.

“Normally, there’s no cushion in the [propylene] market to handle unplanned outages and that’s what causes prices to go up,” Newell said. “But it didn’t happen this year.”

With 12 cents of price volatility so far in 2014, the regional PP market remains well off the pace of 2013, when price increases and decreases totaled 38 cents, according to the Plastics News resin pricing chart.


Comments

PP prices continue trend, fall 3 cents

By Frank Esposito
Senior Staff Reporter

Published: June 19, 2014 4:09 pm ET
Updated: June 19, 2014 4:27 pm ET

Post Your Comments


Back to story


More stories

Image

Ferro sells another piece of its plastics business

December 19, 2014 3:33 pm ET

Ferro Corp. has sold its North American polymer additives business to a private equity firm for $154 million in cash.    More

Image

Antimicrobial polymers firm TiFiber launching pilot production in Ark.

December 19, 2014 10:58 am ET

TiFiber Inc., which makes synthetic compounds to control dangerous microorganisms, will locate a pilot production facility and its future company...    More

Image

Patel named LyondellBasell CEO

December 19, 2014 9:56 am ET

Bhavesh V. “Bob” Patel has been named CEO of Houston-based polyolefins producer LyondellBasell Industries NV, effective Jan. 12.    More

Image

Momentive to get a new name in January

December 19, 2014 9:45 am ET

Momentive Specialty Chemicals Inc. will change its name to Hexion Inc., effective Jan. 15.    More

Image

Thailand's SCG Chemicals buying Norwegian chemical firm Norner

December 19, 2014 9:11 am ET

Thailand's SCG Chemicals Co. Ltd. has announced it has acquired 51 percent of the shares in the independent petrochemical company Norner Holding AS fr...    More

Market Reports

Flexible Packaging Trends in North America

Our latest RESEARCH report examines trends in FLEXIBLE PACKAGING impacting the North American market including a review of economic conditions, key drivers of growth, materials pricing, M&A activity, sustainability challenges and the outlook for 2015.

Learn more

Plastics in Brazil - State of the Industry Report

This in-depth report examines the Brazilian plastics industry from a historical and geographical context. Our analysts provide insight on economic trends and forecasts, growing manufacturing sectors that utilize plastics, private investment opportunities, market environment challenges, and innovations in R&D.

Data tables and charts on producer prices, trade, plastics production and end market indicators is also included.

Learn more

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

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

October 27, 2015 - October 29, 2015Plastics Financial Summit - New York - 2015

More Events