North American PP resin prices fell for the second consecutive month in March, as winter weather affected some deliveries.
Prices for propylene monomer feedstock also fell 1.5 cents for the month. Some PP buyers saw that amount — with a small number even seeing a 2-cent drop — but the change is being shown as a one-cent downward move on this week's Plastics News resin pricing chart.
Regional PP prices also had slid 1 cent per pound in February — again due to weather — after climbing a total of 9 cents per pound in December-January. Planned turnarounds at some propylene production facilities could tighten that market in April, sources said, potentially reducing the chance of another price drop.
Even with the 1-cent March drop, regional PP prices have been far less volatile so far in 2014 than they were in 2013. Pricing saw 27 cents of volatility in the first three months of 2013, with prices going up 21 cents in January-February before falling 6 cents in March. The 2014 market has seen only 7 cents of volatility so far, climbing 5 cents in January and falling 2 cents in February-March.
In the first two months of the year, North American PP sales have climbed 1.4 percent to almost 2.6 billion pounds, according to the American Chemistry Council in Washington. That increase comes entirely from export sales, which almost doubled in the period. Domestic sales, on the other hand, tumbled almost one percent.
February was a particularly strong sales month for PP, with domestic sales up almost 4 percent and export sales more than doubling, according to ACC. For the two-month period, PP sales into sheet surged almost 32 percent and sales to distributors climbed 18 percent.
Weak demand spots, however, were seen in two-month PP sales into injection molded rigid packaging (down almost 18 percent) and injection molded consumer/institutional products (down almost 5 percent).
At the recent IHS World Petrochemical Conference in Houston, IHS PP analyst Joel Morales said that upcoming new supplies of propylene monomer from PDH technology will make North American prices more competitive for North American processors.
Only one PP expansion project has been announced for the region, but IHS expects that about 3 billion pounds of new capacity eventually will be added in the next several years. This change also will lead to increased PP exports from North America, with that total moving from about 600 million pounds in 2013 to almost 2 billion pounds by 2018.