North American polypropylene resin prices surged again in October, while regional prices for solid polystyrene and PET bottle resin continued their slides.
PP prices increased by an average of 4 cents per pound, while solid PS prices declined by 2 cents per pound and prices for PET bottle resin took a 3-cent per-pound dip, according to buyers and market watchers contacted by Plastics News. Those changes are shown on this week's Plastics News Resin Pricing Chart.
The PP hike came after the market took a one-month break, following a 5-cent uptick in August. Regional PP prices now are up a net of 7 cents so far in 2014. The October move was caused by a cost push from polymer-grade propylene monomer feedstock.
“Various planned and unplanned outages resulted in propylene monomer shortages,” market analyst Scott Newell said. “Propylene supply is now improving … [but] falling oil prices are driving propylene down in the rest of the world.
“That's making domestic prices look very over-priced,” added Newell, who's with Resin Technology Inc. in Fort Worth, Texas. “We're expecting a sizable correction [in propylene and PP prices] in the next couple months.”
A major PP buyer in the Midwest U.S. agreed, saying regional PP prices could fall by 12 to 15 cents per pound by the end of the year.
Through September, North American PP sales were up almost 1 percent vs. the same period in 2013, according to the American Chemistry Council. An increase of almost 1 percent in domestic PP sales has been supported by a gain of almost 10 percent of sales of the material into the export market. Domestic sales of PP into sheet applications were especially strong in the nine-month period, climbing 9 percent to more than 1.16 billion pounds.
For PS, the 2-cent October price drop marked the second straight monthly decline for that material. Prices had dropped an average of 4 cents per pound in September.
As is often the case, the PS price slide was connected to prices of benzene feedstock, which fell 10 percent in October to a level of $4.22 per gallon. Regional benzene prices now have fallen almost 20 percent since July.
Some regional PS buyers reported October price declines of 4 cents per pound, but the 2-cent number appeared to take hold in the broader market. Even after the 2-cent drop, regional PS prices remain up a net of 6 cents per pound so far in 2014.
Through September, North American solid PS sales were down almost 3 percent to less than 3.4 billion pounds, according to ACC. Bright spots were provided by sales of solid PS into markets for food packaging/food service (up almost 2 percent to almost 2.1 billion pounds) and electrical/electronic (up more than 2 percent to almost 300 million pounds).
In PET, bottle resin prices tumbled another 3 cents per pound in October after ticking down 2 cents per pound in September. Both decreases are being shown on this week's PN chart. The 5-cent drop now leaves prices for the material down a net of 3 cents per pound so far in 2014.
The regional PET market has recovered from raw material tightness that in part was caused by an August fire at a purified terephthalic acid (PTA) plant operated by British Petroleum plc in South Carolina. With that pressure alleviated, seasonal demand softness is setting in as cooler temperatures cause beverage demand to decline across the region.
Now with 17 cents of price volatility through 10 months, the North American PET sector has exceeded the amount of price volatility it saw for all of 2013. However, that 17-cent total — and 2013's 12-cent total — are low when compared to recent price history. From 2008-12, PET price volatility in the region had averaged almost 35 cents per year.