Oil prices leveled off a bit in March, but North American commodity resin prices remained as unpredictable as ever.
After dropping to $44 per barrel in mid-March, the West Texas Intermediate (WTI) oil price rebounded to near $54 by April 14 — roughly the same level it held in late February. This of course is a far cry from the $100+ levels it held in mid-2014, but it's also not the price collapse some had predicted.
This relative stability allowed North American PVC prices to climb an average of 3 cents per pound for the month, and for PET bottle resin prices to tick up an average of 1 cent per pound. It's a reversal of form for PVC prices, which had been flat in February after falling for three straight months from November-January. Market sources told Plastics News that PVC production in early 2015 has been lower than expected at plants operated by Formosa Plastics Corp. in Baton Rouge, La., and by Westlake Chemical Corp. in Geismar, La.
The 1-cent PET hike surprised some buyers, since demand for the material hasn't been strong, due in part to colder-than-normal weather in much of the U.S. That cold snap flattened demand for carbonated soft drinks and bottled water — two big end markets for PET. Prior to the March uptick, regional PET prices were flat in February, but had plunged a total of 16 cents per pound in November-January.
The modest oil increase also helped regional prices for polyethylene and solid polystyrene to remain flat. PE's stable pricing month was welcome after prices fell for the fourth consecutive month in February, with those four dips totaling 16 cents per pound.
Market watchers are hoping that the April 3 shutdown of a Dow Chemical Co. PE unit in Freeport, Texas, won't have much of an effect on regional PE supplies. One of the site's PE units was shut down after an accidental ethylene release. Dow officials described the event as “a process upset” and had no timetable for the unit's restart.