North American commodity resins continued their early-year price surge in March, with regional prices for polyethylene, polypropylene, polystyrene and PVC all increasing.
The 3-cent PE price hike came about after some back-and-forth between suppliers and processors. Initial reports indicated that the full 6 cents that PE makers had been seeking would take hold. Then it appeared for a brief time that market prices would roll over flat vs. February.
Producers and buyers finally split the difference, moving prices up 3 cents and announcing plans to try for the other 3 cents in April.
A combination of events allowed the 3-cent hike to stick, according to Mike Burns, a market analyst with the Resin Technology Inc. consulting firm in Fort Worth, Texas.
"There were low prices in November and high exports in December," he said. "Then there was restocking in January. This all lined up to reduce [PE] supply."
Supply also was limited by production issues experienced by several resin makers, including Chevron Phillips Chemical Co. CP Chem on March 13 declared force majeure on high density PE because of a power outage at its plant in Orange, Texas.
The March hike was the second consecutive monthly increase for regional PE prices, following a 5-cent January hike. Prices had been flat in January, after falling an average of 2 cents per pound in December. They were up a net of 4 cents for full-year 2016.
U.S./Canadian sales of low and linear low density PE came charging out of the gate in the first two months of 2017, with HDPE trailing behind. Two-month sales of LDPE were up 7 percent, according to the American Chemistry Council, with regional LLDPE sales through February up almost 7 percent. HDPE in the region only managed two-month sales growth of less than 1 percent.
PP on the rise
North American PP resin prices increased by 4 cents per pound in March. The increase was connected to tightness in supplies of propylene monomer feedstock, which caused prices for that material to rise as well. Regional PP resin prices now are up 20.5 cents per pound since Jan. 1.
But market sources told Plastics News that the March PP hike might be the last for a while.
"March will be the peak," said Scott Newell, a market analyst with RTI. "I see a large correction coming. We can already see the signals that this thing is starting to turn around."
A major regional PP buyer agreed, saying that "it appears all resins have peaked and the downward slide is next."
North American PP sales were up almost 1 percent in the first two months of 2017. Domestic sales were down almost 1 percent in that period, but export sales more than doubled. Regional PP sales grew 0.4 percent in full-year 2016.
Regional solid PS prices shot up an average of 6 cents per pound for March. PS prices now have climbed for three straight months after being flat in December. Increases in January and February totaled 13 cents per pound.
The March price hike for PS surprisingly went against directional pricing for benzene, which declined by 7 cents per gallon for the month. Benzene is used to make styrene monomer and in recent years has had a strong effect on prices for PS resin.
North American PS sales grew 2 percent in the first two months of 2017. Sales of the material into electrical/electronic uses in particular were strong, growing more than 3 percent in that two-month period.
For PVC, a 2-cent March hike was the second straight monthly increase for that material. Prices had risen 4 cents in February. Prior to that, prices had been flat since November.
The PVC market is moving into the construction season, which is traditionally strong for the material. More than 60 percent of domestic PVC demand comes from the construction market.
Through February, U.S./Canadian PVC sales were up 3.3 percent. Domestic sales grew almost 6 percent, but were dampened somewhat by an export sales drop of more than 1 percent.
PET down, ABS up
PET bottle resin was the only North American commodity resin market to see lower prices in March, as prices ticked down an average of 0.5 cents per pound for March. The March drop ends a streak of six consecutive monthly price increases for the material.
The PET decline reflects lower prices for feedstocks such as paraxylene and purified terephthalic acid. The six previous increases had totaled 9.5 cents per pound.
In the engineering resins market, regional ABS prices jumped an average of 6 cents per pound in March, after being up 8 cents in February. Prices for the material are being driven up by higher prices for acrylonitrile and butadiene feedstocks, as well as higher prices for benzene, which is used to make styrene monomer. ABS makers now are seeking further increases of 5 cents per pound for April.