North American resin prices danced to their own tune in March, with prices for PVC and PET bottle resin both up as polypropylene prices trended down.
Regional prices for PVC are up an average of 3 cents per pound since March 1, as improving demand was amplified by tightness in supply. The increase marks a change in direction for PVC pricing, which had been flat in February after falling for three straight months from November-January.
The January drop was 2 cents, meaning that the March increase leaves PVC prices up a net of 1 cent so far in 2014.
Market sources reported that PVC production has been lower than expected at plants operated by Formosa Plastics Corp. in Baton Rouge, La., and by Westlake Chemical Corp. in Geismar, La. PVC makers also have been able to keep the North American market tight by selling material into the export market, which is improving in early 2015. Demand from some PVC buyers also has been “a little above plan” so far this year, one source said.
March might be improving, but the first two months of 2014 were not that great for U.S./Canadian PVC sales. Overall sales were down just over 4 percent, according to the American Chemistry Council, with a domestic drop of almost 3 percent worsened by an export sales drop of more than 7 percent.
PET bottle resin prices for March were up an average of 1 cent per pound, which surprised some market watchers, since demand for the material hasn't been all that robust. Colder than usual March weather did not do much to help consumption of carbonated soft drinks and bottled water — two big end markets for PET.
The PET hike also reverses pricing direction for that material. Prices had been flat in February after tumbling a total of 16 cents per pound in the three-month November-January period. One market watcher told Plastics News that the 1-cent March hike “was fair” based on raw material price movement, but he added that feedstock price stability in April — tied to lower oil prices — might make it difficult for PET makers to raise prices again.
“It's hard to tell how much [PET] demand is going to show up,” the source said.
Three North American PET makers are taking action against alleged dumping of foreign material by seeking duties from the U.S. International Trade Commission. (See related story.)
In PP, a 1-cent March price drop also surprised some buyers, since demand for the material was off to a healthy start so far in 2015. North American demand in the first two months of the year surged more than 7 percent, according to ACC, with domestic growth of 9 percent dampened by a drop of more than 30 percent in export sales.
Domestic PP sales growth in that two-month period was powered by gains of almost 23 percent in injection molded housewares and of 13 percent in sheet. The March PP price drop erases a 1-cent gain prices had seen in February. Prices for the material had fallen a total of 20 cents per pound in December-January.
April could see a battle between regional PP buyers and producers, one source said, as monomer prices indicate another slight drop, but producers have been agitating for 2 cents in margin improvement on resin.
Moving forward, the North American PP field might be affected by lower propylene monomer supplies resulting from a March 30 fire at a propylene unit operated by ExxonMobil Chemical in Beaumont, Texas. No one was injured in the event, and the unit remained out of operation as of April 2. Restart procedures were underway, but no timetable was set for the unit to resume production.
