June was an active pricing month for polypropylene, PET and polystyrene in North America — but prices for polyethylene and PVC chose to kick back and enjoy the summer.
Buyers of PP and PET bottle resin each saw price hikes take hold in the region during June, with PP up 1 cent and PET up 3. The 1-cent PP increase for June evened out a similar drop in May and ended a streak in which prices for the material had fallen five times in six months. Even with that increase, regional PP prices are down a net of 14 cents per pound so far in 2015. Prices also had taken a 10-cent plunge in December 2014.
The June PP increase also could be a sign that strong North American demand is finally having an impact on the market. Through May, sales in the region were up 6.4 percent, according to the American Chemistry Council in Washington. Domestic sales growth of almost 7 percent was dampened a little by a drop of 4.5 percent in export sales.
Regional PP demand growth through May was led by a gain of almost 17 percent in injection molded consumer and institutional products, including furniture and housewares. Regional sales of PP into sheet also were up 13 percent in those five months.
Scott Newell, PP market analyst with Resin Technology Inc. in Fort Worth, Texas, told Plastics News that the domestic PP field “is entering a new era,” where propylene monomer is plentiful and at the lowest price around the globe. As a result, he added, PP resin “is seeing growth and high utilization rates and producers have pricing power,” he added. “Again, this is all very different from recent history.”
A PET bottle resin hike of 3 cents per pound was seen for North America in June, marking the third straight month that prices for that material have increased. The three-month wave of increases now totals 10 cents per pound. Demand for PET bottle resin has improved with warm weather — which drives beverage demand — as its feedstock costs have climbed.
As prices for PP and PET rose, the PS market headed in the other direction, slipping 5 cents per pound in June. The drop came as benzene feedstock prices tumbled 60 cents per gallon. Benzene prices had jumped a total of 77 cents in April-May, but whipsawed back down, taking PS prices down with them. The April-May benzene hike had lifted PS resin prices a total of 8 cents per pound. With the 5-cent drop, prices for the material now are down a net of 8 cents since Jan. 1.
North American PS sales grew 1 percent in the first five months of 2015, according to ACC. Sales of PS into the market's leading food packaging/food service end market were up almost 4 percent in that period. Food packaging/food service accounted for almost 60 percent of regional PS sales in those five months.
After climbing in May for the first time in eight months, regional PE prices resumed their slumber in June. In those prior eight months, the material had absorbed four price drops totaling 16 cents.
A PE buyer in the southeastern United States previously told Plastics News that he expects regional PE prices to be flat through the summer, unless Asian prices drop below North American prices, as was the case earlier in 2015.
Regional PE sales posted solid growth in the first five months of 2015. Sales of high density PE were up almost 7 percent, with linear low density PE sales up more than 5 percent and sales of LDPE up almost 2 percent.
HDPE sales growth of almost 3 percent was bolstered by a 30 percent surge in export sales. Domestic LLDPE growth of more than 6 percent was dampened by an export sales gain of less than 1 percent. For LDPE, an export sales drop of almost 6 percent softened a domestic sales gain of almost 4 percent.
North American PVC resin prices were flat for a third straight month in June, following a 3-cent increase that hit the market in March. U.S./Canadian PVC demand growth essentially was flat in the first half of 2015, growing only 0.1 percent. Export sales growth of 0.3 percent provided a slight boost to flat domestic sales.
Among major domestic PVC end uses, siding and related applications showed the most life in the first half, with demand increasing just over 10 percent. Regional demand for PVC in extruded film and sheet was off almost 2 percent for the half.
PE and PVC prices remained flat even as prices for crude oil — a global price setter for ethylene monomer used in both of those materials — fell 5 percent in June. West Texas Intermediate crude oil prices began the month around $61 per barrel, but fell to $58 by the time June ended.
Natural gas prices rose slightly in June — with a 4 percent hike taking prices from $2.70 per million British thermal units to $2.80 during June — but the material still maintained a strong advantage vs. crude oil as a regional feedstock.