The plastic resin market may not be known for its limbo dancers — but buyers continue to look at prices and sing out: How low will they go?
North American prices for polyethylene and polystyrene fell again in February, along with prices for nylon 6 and 6/6 and polycarbonate. Prices for PVC and PET bottle resin were flat for the month after falling in January, while polypropylene broke the trend by seeing a slight price increase in February, due in part to short-term supply issues.
The driver behind these plunges, of course, is the global oil market. Oil prices affect petrochemical prices, even though natural gas is the more commonly used feedstock in North America and the Middle East. West Texas crude oil prices were near $47 per barrel in late trading March 12, continuing their slide from over $100 a barrel seen as recently as mid-2014.
PE's February drop of 5 cents per pound marked the fourth consecutive month that North American prices for that material have dropped, with the quartet of plunges totaling 16 cents. Prior to this streak, the regional PE field hadn't seen a single price decline in two years.
Market watchers told Plastics News that March could see an additional PE price drop. U.S./Canadian PE sales didn't get off to a great start in January, according to the American Chemistry Council, with low density PE sales down more than 2 percent, high density PE sales off by more than 8 percent and linear low density PE sales swooning more than 12 percent compared to the same month in 2014.
Pricing challenges continue to confront the PS market, where prices now have dropped for six straight months, most recently falling 2 cents per pound in February. The six-month slide has brought regional prices for the material down by a total of 23 cents per pound.
The PS price slump has been tied into prices for benzene feedstock, which have lost around 60 percent of its value between August and February, dropping from $5.06 per gallon to $2.01. PS also broke slowly from the gate in 2015, with January sales down more than 4 percent.
Price declines in nylon and PC also were feedstock-related as both materials are expected to benefit from strong automotive market demand in 2015. Nylon 6 resin prices slipped a total of 7 cents per pound in the first two months of 2015, with nylon 6/6 and PC resin prices sliding 8 cents per pound in that period as well. Automotive uses account for 40 to 50 percent of North American nylon resin demand.
Regional prices for PVC and PET bottle resin held their ground in February, leading producers of those materials to hope that the worst of their recent slides are over. PVC prices had fallen a total of 7 cents per pound in the three-month November-January period. PVC makers are hoping for improved results in 2015, after 2014 demand fell almost 2 percent. A gain of almost 3 percent in domestic sales of the material in 2014 was wiped out by a drop of more than 10 percent in export sales.
PET bottle resin prices in the region decreased by an average of 16 cents per pound in the three-month November-January span — including a 5-cent January dip — before not moving in February. Supplies of imported PET also have been affected by labor situations at docks on the U.S. West Coast, which have reduced supply availability.
Some global PET feedstocks are seeing their markets solidify, leading market watchers to be apprehensive about predicting further price drops. Demand for PET bottle resin, however, continues to be damaged by a long-term downward U.S. trend in consumption of carbonated soft drinks, the largest end use for the material.
Polypropylene, on the other hand, saw prices take an unexpected 1-cent per-pound increase in February. Prices had plummeted a total of 20 cents in the previous two months as feedstocks swooned. The slight February uptick was the result of production limits at plants operated by Ineos Group and Phillips 66.
PP sales charged hard into 2015, surging almost five percent vs. the same month in 2014. Domestic sales for the month grew almost 6 percent, even as export sales slumped more than 20 percent.