North American prices for polyethylene and polystyrene resins continued to fall in February, while regional prices for polypropylene showed a surprising increase.
Prices for all grades of PE are down an average of 5 cents per pound since Feb. 1. Regional PE prices now have fallen for four consecutive months, after not seeing a single price drop for two years. The four-month total has shaved an average of 16 cents per pound off of PE prices.
On the feedstock side, prices for crude oil — both in the region and globally — remain low when compared to prices of the last few years. Regional prices were near $48 per barrel in late trading Feb. 26, a drop of more than 50 percent from prices seen in in mid-2014. Oil is the global PE price-setter, even though most PE made in North America is based on natural gas.
U.S./Canadian PE demand is off to a rough start in 2015. In January, sales of linear low density PE were down 12 percent, according to the American Chemistry Council, with high density PE sales down 8 percent and sales of low density PE down 2 percent compared to the same month in 2014.
One resin buyer in the southeastern U.S. told Plastics News that recent PE prices have been even lower in the secondary market, which could be an indicator that more price declines could take place in March. Dow Chemical Co. is attempting to raise regional prices by 5 cents per pound effective March 15.
North American PS prices took a 2-cent tumble in February after swooning 9 cents the month before. Prices for the material now have dropped for six straight months, reducing prices by a total of 23 cents per pound.
The PS market continued to mirror prices for benzene feedstock, which fell almost 8 percent to $2.01 per gallon in February. Regional PS sales declined by 3 percent in 2014, a reversal from the 1 percent gain shown in 2013.
One market watcher said that some PS buyers saw an additional 2 cent drop in January, implying that the 2 cents for February would be allowing other suppliers to keep up. PS maker Americas Styrenics had pre-announced the 9-cent January drop in late December. Suppliers who gave an additional 2-cent price cut in January then would have a price advantage over Americas Styrenics.
In PP, the tide reversed itself, sending regional prices up 1 cent per pound after they were clobbered by 10-cent drops in both December and January. Short-term PP supplies in the region have been impacted by production limits at plants operated by Ineos Group in Alvin, Texas, and by Phillips 66 in Linden, N.J.
Unlike PE, North American PP demand has hit the ground running in 2015, growing almost five percent in January vs. the same month in 2014. Domestic sales for the month grew almost 6 percent, even as export sales slumped more than 20 percent.
Sales of PP into injection molding markets jumped 13 percent in January, led by sales gains of more than 25 percent in housewares and of almost 19 percent in cups and containers.