Resin price volatility is here to stay, petrochemical analyst Howard Rappaport told an Antec audience.
Rappaport, global business director of Chemical Market Associates Inc. in Houston, outlined global trends in polyethylene and polypropylene and their feedstocks during a keynote speech May 4 at the Society of Plastics Engineers annual conference in Boston. He explained the impact of new capacity being built in the Middle East and Asia, and oil and natural prices.
For PE, Rappaport said: “Prices are elevated, but we do expect them to moderate over the next several quarters. However, unplanned outages, weather events or any other unforeseen issues can interrupt the supply chain.”
Low-priced natural gas has helped North American PE makers, through affordable ethylene. But natural gas produces less PP than does higher-priced crude oil, so it hurts PP producers.
PP, which used to be a relatively low-cost material, has become so expensive that it is getting de-selected for some applications, Rappaport said.