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
Companies & Associations

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

Ford moving forward in carbon fiber for 'high volume' use

April 17, 2015 10:21 am ET

Ford Motor Co. has signed a deal with a carbon-fiber manufacturer to jointly explore “high-volume” automotive uses for the lightweight...    More

Image

Force majeure declared at six European sites since mid-March

April 17, 2015 1:10 pm ET

At least six European resin makers have declared force majeure on polyethylene, polypropylene and related products since mid-March, leading to higher ...    More

Image

Executives step down from Star Thermoplastics

April 17, 2015 12:56 pm ET

Executives Randall Fortin and Larry Johnson no longer are with materials firm Star Thermoplastics Alloys & Rubbers Inc.    More

Image

Zoltek expanding CF capacity in Europe

April 17, 2015 10:12 am ET

Leading carbon fiber group Zoltek Corp. has signed a strategic agreement with the Hungarian government to expand its operation in northern Hungary,...    More

Image

Hanwha Azdel adds capacity in Lynchburg

April 16, 2015 2:01 pm ET

Composite maker Hanwha Azdel Inc. will add space and a new production line at its Lynchburg, Va., production facility, the company announced April 16.    More

Market Reports

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

Injection Molding Market Analysis & Processor Rankings

Plastics News BUNDLED package contains our in-depth Market Analysis of the Injection Molding segment. You will gain keen insight on current trends and our economic outlook.

As a BONUS this includes PN's updated 2014 database of North American Injection Molders RANKED by sales volume. Sort, merge, mail & prospect by end market, materials processed, region, # of plants and more.

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

Upcoming Plastics News Events

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

September 15, 2015 - September 17, 2015Plastics Caps & Closures - September 2015

More Events