North American polyethylene prices receded a bit in June, while polystyrene prices in the region have increased since May 1.
The PE move has brought prices for high and linear low density PE down an average of 3 cents per pound since June 1, while prices for LDPE have taken a 6-cent slide, according to buyers and market watchers contacted recently by Plastics News.
Prices for all grades of PE in the region had increased an average of 11 cents per pound in the first five months of 2011. That worked out to an increase of about 13 percent, based on dairy blow molding grades of HDPE, according to the Plastics News resin pricing chart.
Inventories of PE climbed at rates faster than demand during June, sending prices down, said Mike Burns, a PE market analyst with Resin Technology Inc. in Fort Worth, Texas. Lower prices for crude oil also played a role in the slide, as did a lack of export sales, Burns added.
U.S./Canadian PE sales saw mixed results in the first four months of 2011, with HDPE and LLDPE each enjoying solid growth, while LDPE struggled. Overall sales of HDPE grew almost 8 percent, with 10 percent export growth helping to boost domestic growth by 7 percent, according to the American Chemistry Council in Washington.
LLDPE's sales gain of 4.5 percent was the result of 7.5 percent domestic growth being watered down by a 3 percent drop in exports. In LDPE, an overall sales decline of 0.5 percent occurred as an 11.5 percent drop in exports wiped out domestic sales growth of more than 2 percent.
In PS, prices jumped an average of 7 cents per pound in May, and now are up a net of 17 cents per pound for the year, according to the PN chart. On injection molding grades of high-impact PS, that is an increase of about 18 percent.
But PS increases may have run their course in the short term. Prices were flat in June as benzene — used to make styrene monomer — fell 4 percent to $4.06 per gallon. Benzene prices for July already have settled down 9 percent, to $3.69 per gallon, leading some market watchers to think a price drop is in the works for PS resin.
“Buyers are pushing for something lower,” said Mike Smith,” a PS market analyst with DeWitt & Co. consulting firm in Houston. “But volume is still ahead of where it was last year. There's been continued strength in food service and food packaging, and durables are going forward,” he said.
“Benzene is following energy and a lack of U.S. demand,” said Wilf Kimball, a market analyst with the Plaza Group, a chemicals distributor based in Houston. “Everything's global now, and there's less demand for styrene and polystyrene.”
DeWitt chemicals analyst Chuck Venezia added that benzene supplies in Asia have been long, causing some of that material to surface in North America. That movement, in turn, has helped drive benzene down in each of the last two months.