Short-term PP supplies in the region could be affected by force majeure supply limits at a resin plant operated by Ineos Group in Alvin, Texas, and by similar conditions at a plant operated by Phillips 66 in Linden, N.J. The Linden plant had been scheduled for a 30-day maintenance turnaround beginning March 1, but operational issues caused Phillips 66 to close the plant earlier than expected, officials said in a recent letter to customers.
North American PP demand also was unimpressive in 2014, finishing essentially flat with 2013. Export sales growth of 5.5 percent was neutralized by a decline of less than 1 percent in the domestic market. Regional sales of PP into the sheet market enjoyed a strong year in 2014, increasing by almost 8 percent.
For PS, Americas Styrenics — one of North America's three remaining PS makers — had announced the 9-cent January drop in late December. That move raised eyebrows at the time — since few buyers recalled announced decreases of any kind, much less one that large being made a month ahead of time — but it actually may have prevented PS prices from dropping even further. That's because prices for benzene, a key feedstock used to make styrene monomer, actually dove 35 percent in January to $2.20 per gallon.
Market sources told Plastics News that more benzene price drops might be seen in February, resulting in lower PS prices as well. The January PS decline was the fifth straight monthly drop, for a total of 21 cents. Regional PS demand for 2014 was down about 3 percent, returning the market to a loss after it had notched its first growth year in a decade in 2013. Even with the annual loss, PS sales into its flagship food packaging/food service end market managed to grow 1.5 percent for the year. That sector accounted for almost 60 percent of North American PS sales in 2014.
PE buyers are experiencing an unfamiliar feeling, since January's 4-cent drop is the third straight for that material, following a total of 7 cents in decreases from November and December. Some major North American PE buyers were pushing for a 5-cent price drop in January, but in most cases producers were able to limit the decrease to 4 cents, according to market sources contacted by Plastics News.
Based on the amount of the drop in oil and competitive prices from Asian PE, market sources have told PN that another 5 cents could come out of the North American PE market in February.
On the demand side, domestic sales of high density and linear low density PE showed solid growth for 2014, but losses in export sales swung both materials into negative territory for the year. Low density PE showed less domestic sales growth, but still managed to finish slightly positive in 2014.
Domestic HDPE sales grew 2.5 percent for the year, but a 19 percent decline in export sales added up to an overall decline of 1.2 percent. In LLDPE, domestic sales grew a solid 2.9 percent, but an export slide of almost 13 percent created a net loss of 0.7 percent for the year.
LDPE fared slightly better, with a domestic sales gain of 1.4 percent reduced by a 3.2 percent export drop, but remaining an overall increase of 0.4 percent.
PVC makers have been able to manage price drops for that material. The 2-cent January drop was the third in a row, but the total three-month price slide has equaled only 7 cents. Demand for the material could be picking up as construction companies build inventories of pipe and other PVC products in advance of the spring building season.
U.S./Canadian PVC sales slipped almost 2 percent in 2014. A gain of almost 3 percent in domestic sales was wiped out by a plunge of more than 10 percent of sales into the export market. Bright spots for the domestic PVC market in 2014 came in sales to compounders, which skyrocketed 42 percent, and into siding and related uses, which were up more than 4 percent.
Polymer Points is a monthly column by Plastics News senior reporter Frank Esposito. Contact Esposito on Twitter at @fesposito22.