With spring heating into summer, North American prices for polyethylene, polystyrene and PET bottle resin prices have warmed up as well.
Regional PE prices surged up by 5 cents per pound in May, marking the first time in eight months that prices for that material had increased. In the meantime, the material had absorbed four price drops totaling 16 cents.
The list of reasons for the May increase included higher global feedstock costs, which were the result of oil price increases. Supplies of both PE and ethylene also were tight in both Asia and Europe. These conditions led to above average exports from North America to Latin America, Asia and Europe.
A PE buyer in the southeastern United States said that although the May increase took hold, he expects prices to be flat for the next few months, unless Asian prices drop below North American prices, as was the case earlier in 2015.
U.S./Canadian PE sales results showed solid gains in the first four months of 2015, according to the American Chemistry Council. High density PE sales in the region were up 8 percent, with domestic sales growth of more than 4 percent boosted by export sales growth of almost 30 percent.
Domestic HDPE sales growth was led by the third-party market, where sales to resellers surged almost 45 percent for the four months, while sales to distributors jumped 15 percent.
U.S./Canadian sales of linear low density PE surged ahead at a clip of almost 5 percent in the four-month period, while low density PE sales ticked up a little more than 2 percent. In LLDPE, domestic sales growth of more than 6 percent was dampened by a drop of more than 1 percent in export sales. For LDPE, domestic sales growth of almost 4 percent was reduced by an export sales drop of more than 4 percent.
Four-month sales of LLDPE into shipping sacks were up 16 percent. LDPE sales to distributors ballooned 47 percent in that period.
At the producer level, Westlake Chemical Corp.'s first-quarter olefins sales volume in pounds — including PE — was up almost 8 percent vs. the same period last year. LyondellBasell Industries' first-quarter PE sales volume in pounds was up 6 percent in the Americas, while its first-quarter PP sales volume in pounds increased by 3 percent in the region.
Regional polystyrene prices weren't far behind PE, climbing 3 cents per pound in May. It was the second consecutive monthly PS price increase, following a month of flat pricing in March and a combined drop of 11 cents in the first two months of the year.
Higher prices for benzene feedstock again played a role in the May PS increase. Benzene prices jumped 26 cents per gallon in May, reaching the $2.85 mark and bringing the two-month total price hike to 77 cents. Regional PS makers had been seeking increases of 6 cents in May, but settled for half of that amount after successfully lifting prices 5 cents per pound in April.
North American PS sales climbed almost 3 percent in the first four months of 2015, according to ACC. Growth in the market's flagship food packaging/foodservice end market were especially strong, increasing by more than 5 percent. That sector accounted for about 61 percent of total PS sales in the region for that four-month period.
A PET bottle resin hike of 4 cents per pound was seen for North America in May, marking the second straight month that prices for that material have increased by that amount. Demand for PET bottle resin have improved with warm weather — which drives beverage demand — as its feedstock costs have climbed.
It's the third straight monthly hike for the material overall, 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.
Regional PP prices trickled down 1 cent per pound in May, marking the second straight monthly decline for that material — and the fifth in six months. North American PP prices now are down a net of 25 cents per pound since December.
The 1-cent PP downturn matched a similar drop in price for propylene monomer feedstock. In April, regional PP makers had successfully increased their profit margins by limiting the resin price drop to 4 cents per pound, even as propylene prices fell 4 cents.
Sales of PP in North America surged more than 7 percent in the first four months of 2015. Domestic sales growth of almost 8 percent was dampened slightly by an export sales decline of almost 7 percent.
Regional sales of PP into injection molding applications soared 11 percent in that four-month period, according to ACC. That growth was led by a 20 percent leap for sales of PP into consumer and institutional products.
North American PVC resin prices were flat for the second consecutive month in May, following a 3-cent increase that hit the market in March. U.S./Canadian PVC demand growth has been solid in the first four months of 2015, rising almost 4 percent. Export sales growth of almost 13 percent has lifted domestic sales, which were up only about 1 percent.
For domestic PVC, sales into rigid pipe and tubing improved 15 percent in the four-month period. Rigid pipe and tubing is the biggest single end market for regional PVC, generating 45 percent of domestic sales through April.
The raw materials that form the basis for North American commodity plastics didn't generate much movement during May. West Texas Intermediate crude oil prices bounced between $58 and $62 per barrel for most of the month, but ended roughly where they had started — between $60 and $61 per barrel.
On the natural gas side, prices fell about seven percent to $2.65 per million British thermal units during May, allowing the material to maintain a strong advantage vs. crude oil as a regional feedstock.