April again offered something for everyone in the North American commodity plastics market, with prices for polystyrene and PET bottle resin up, polypropylene prices down and prices for polyethylene and PVC holding firm.
This variation occurred even as regional oil prices climbed from around $51 a barrel on April 1 to almost $60 a barrel by the end of the month. Regional prices for natural gas increased only slightly in the same comparison, moving from about $2.65 per million Btus to $2.75.
The PS move was the largest, taking prices up an average of 5 cents per pound. That was the result of a price increase of almost 25 percent for benzene feedstock, which is used to make styrene monomer. Regional PS prices had been flat in March — in spite of a slight benzene increase — after falling a total of 11 cents in January and February.
May could bring with it another PS price hike, as benzene prices could be up as much as 30 cents per gallon. PS makers already have announced attempts to raise PS prices by 6 cents per pound in anticipation of the benzene rise.
On the demand side, North American PS sales were strong in the first quarter of 2015, growing almost 3 percent, according to the American Chemistry Council. This growth was led by a 6 percent gain in sales of PS into food packaging and food service.
Bottle resin dynamics
A PET bottle resin hike of 3 cents per pound was seen in April as demand for the material improved as its feedstock costs climbed. Some buyers saw only 2 cents in movement, while others saw 4 cents. Plastics News reported 3 cents as the market average.
The increase is the second consecutive monthly hike to hit the regional PET bottle resin field, following a 1-cent-per-pound increase in March. Prices had been flat in February after tumbling a total of 16 cents between November and January. The April hike surprised some market watchers who had expected prices to be stable.
The 4-cent PP price drop also surprised some observers, since demand for the material has been strong so far in 2015. The price decline was prompted by a 6-cent drop for propylene monomer feedstock. PP makers — showing more discipline in the last year — were able to limit the resin to a 4-cent drop, thereby adding 2 cents to their own profit margins.
The drop is the second consecutive monthly downswing to hit the PP market, and the fourth in five months. Regional PP prices now are down a net of 24 cents since December, including drops of 10 cents each in December and January.
North American PP demand was strong in the first quarter of 2015. Total sales growth was 7.3 percent vs. the same quarter in 2014, as domestic growth of 9 percent was dampened by a drop of almost 31 percent in export sales. Looking to May, market watchers expect propylene monomer prices to settle flat to slightly down, but resin prices could still be up slightly if monomer settles flat and producers push for more margin.
The PE market's second consecutive flat month followed consecutive declines totaling 9 cents per pound in January and February. This complacency might be coming to an end, however, as PE makers are aggressively pushing for increases of 5 cents per pound in May.
U.S./Canadian PE sales were mixed in the first quarter of 2015. Sales of HDPE grew almost 6 percent, with domestic sales growth of almost 3 percent amplified by a gain of almost 24 percent in export sales.
Sales of LDPE and LLDPE each were flat, however. In LDPE, a domestic sales gain of 2 percent was canceled out by an export drop of almost 9 percent. For LLDPE, domestic sales grew 1 percent for the quarter, but that growth was negated when export sales fell almost 5 percent.
The PVC market took a breather in April after prices climbed 3 cents per pound in March. Prices also had been flat in April after dropping 2 cents in January. Market watchers said they would not be surprised if regional PVC prices were flat in May as well.
Regional PVC sales growth was modest in the first quarter, growing about 1 percent. Domestic sales were down 0.5 percent, but export sales jumped almost 5 percent. The quarter also was a little rough for PVC's huge rigid pipe and tubing end market, where sales fell almost 2 percent. That category accounted for 45 percent of domestic PVC sales for the quarter.