Commodity resins rang up solid sales growth in the U.S. and Canada in the first half of 2015.
At resin distributor Osterman & Co. Inc. of Cheshire, Conn., President John Dwyer said that growth at the firm's customers “has tracked with or outperformed” the ACC numbers so far in 2015.
“The second quarter [of 2015] was better for the U.S. economy overall and for plastics as well,” he added. “We were surprised to see negative [U.S. economic] numbers in the first quarter. It felt like 4 percent growth for us.
“And it was more than just customers restocking,” Dwyer said. “A lot of them had projects in the pipeline.”
Sales of high density polyethylene, linear low density PE and polypropylene led the way in the first half, each with growth of more than 6 percent vs. the first half of 2014, according to the American Chemistry Council in Washington.
HDPE sales grew 7.1 percent to 9.4 billion pounds, with LLDPE up 6.1 percent to 7.3 billion pounds and PP increasing 6.3 percent to 8.6 billion pounds. The HDPE and LLDPE totals are for the U.S. and Canada, while the PP number also includes Mexico.
Regional sales of low density PE edged up 1.5 percent to 3.5 billion pounds, while sales of solid polystyrene and PVC eked out small gains. Solid PS sales were up 0.4 percent to 2.24 billion pounds, as PVC sales grew 0.1 percent to 7.3 billion pounds.
Domestic market sales of PP and LLDPE each grew 6 to 7 percent in the first half. Sales of HDPE and LDPE were up 3 to 4 percent domestically for the six-month period, while domestic sales of PVC were flat.
In the export market, sales of HDPE soared 29 percent, while LLDPE sales were up 3 percent and PVC sales ticked up 0.3 percent. Sales of PP and LDPE didn't fare as well in the export field, with each falling 5-6 percent for the half.
Resin makers sold more HDPE, LDPE, PP and solid PS to third-party distributors in the first half vs. the year-ago period. Distributors bought 36 percent more HDPE for the half, and 3 to 15 percent more each of LDPE, solid PS and PP. The solid PS total includes sales to resellers. LLDPE sales to distributors lagged the field, falling 13 percent.
Resellers also bought more HDPE, LDPE, LLDPE and PP in the first half, with HDPE leading the way with a 36 percent gain. Sales of LDPE, LLDPE and PP to distributors jumped 3 to 11 percent. PVC was the only area without reseller sales growth, as it reported flat sales.
North American resin distribution leader Nexeo Solutions has seen similar first-half growth patterns, commercial vice president Vaughn Deasy said. PE sales growth at Nexeo “has slightly exceeded industry growth, largely as a result of increased focus on selling volume polymers,” he explained. “Our polypropylene growth has been more restricted.”
Nexeo — based in The Woodlands, Texas — ranks as the largest distributor of PP in the U.S. Deasy added that all PP suppliers in the region remain sold out and on some form of sales control, and many suppliers of that material have battled production problems so far in 2015.
Among individual markets, Deasy said that Nexeo's dedicated efforts to focus on health care and automotive “continue to pay dividends, with those segments delivering above average growth.” He added that the firm's expansion into Mexico with substantially expanded resources “is positioning Nexeo well, with excellent growth associated with migration of manufacturing south of the border.”
Resin distributor Osterman & Co. is looking for growth in Mexico, too. Osterman recently formed a joint venture with Mexican PE distributor Industrial Mafra SA de CV. The JV will operate as Osterman Plastics de Mexico S de RL and is expected to help both firms grow their presence in the Mexican market.
The formation of the JV is Osterman's third move into Latin America in the last six years. In 2009, the firm founded its Latin American Polymers unit, followed by its 2013 purchase of resin distributor Quimtec LP of San Jose, Costa Rica.
In addition to Nexeo's Mexican efforts, the Osterman-Industrial Mafra JV is the second Mexican transaction made this year by a U.S.-based resin distributor. In May, M. Holland Co. of Northbrook, Ill., formed a partnership with Mexican distributor Grupo Solquim SA de CV.
Top growth end markets for HDPE in the first half included retail bags (up 4.6 percent) and household chemical bottles (up 5 percent). Regional LDPE market growth was led by sales into non-food packaging film, which were up 8.4 percent.
For LLDPE, sales into food packaging film were up 7 percent, and sales into trash and can liners were up 13.2 percent. Top growth sectors for PP in the first half were injection molded housewares (up 18.7 percent), injection molded cups and containers (up 16 percent) and thermoformed packaging sheet (up 17 percent).
The fastest-growing first-half end market for solid PS was food packaging/food service, where sales grew 3.1 percent, For PVC, first-half sales into siding and related uses led the way with growth of 10.1 percent.
