Maybe it was the summer heat or the lure of an exotic vacation. Whatever it was, polypropylene and solid polystyrene were the only two North American commodity resin markets to show any movement in July.
Regional PP prices dipped a penny per pound as solid PS prices shot up 6 cents per pound. Prices for polyethylene, PVC and PET bottle resin maintained their June levels, although some PET buyers saw part of the 3-cent June increase take hold in July.
PP's 1-cent July drop was the third straight month that the market moved by that amount. The drop followed a 1-cent June hike, which in turn had followed a 1-cent May drop. Even with these mini-moves, regional PP prices are down a net of 15 cents per pound so far in 2015, mainly from a 10-cent drop that hit the market in January. Prices also had taken a 10-cent plunge in December 2014.
In the first half of 2015, North American PP sales were up 6.3 percent, according to the American Chemistry Council. A domestic sales gain of almost 7 percent was tempered by a drop of almost 6 percent in export sales.
July also saw the PP market receive confirmation that Formosa Plastics Corp. USA will build a new PP production line at its site in Point Comfort, Texas. That line is expected to use new propylene monomer feedstock produced by Formosa and others using propane dehydrogenation (PDH) technology.
The regional solid PS market has kept buyers guessing all year, mainly because of volatility in pricing for benzene feedstock. July was no different, as the 6-cent July increase followed a drop of 5 cents in June. That 5-cent decline had come after a combined 8-cent increase in April through May. Even with the 6-cent July hike, regional PS prices remain down a net of 2 cents per pound in 2015.
The 6-cent hike looks to be short-lived, however, as the region's three major PS makers already have announced price decreases for August. Total Petrochemicals has announced a 3-cent decrease, while Americas Styrenics and Styrolution each have announced decreases of only 2 cents.
Market sources were uncertain if the latter two firms would match the Total move. It's the second time this year that Americas Styrenics — based in The Woodlands, Texas — has made the rare move of officially announcing a price drop, as opposed to letting the market play itself out during the month. The firm previously announced a 9-cent decrease for Jan. 1.
The July hike was tied in to an 80-cent per-gallon surge in price for benzene. That 35 percent increase lifted benzene prices to $3.05 per gallon. Prices for the material for August are expected to be down about 8 percent to $2.80, prompting PS makers to issue pre-emptive decrease announcements.
North American PS sales were up 0.4 percent in the first half of 2015, according to ACC. Sales of PS into its leading food packaging/food service end market were up 3 percent for the half.
The North American PE market is living up to buyers' expectations of a sleepy summer. Prices were flat again in July, as they were in June. Market sources, however, now are anticipating that prices will fall at least 3 cents per pound in August.
For the year, regional PE prices are down a net of 4 cents per pound, as a 5-cent May increase partially offset decreases from earlier in the year. In the first half of 2015, HDPE sales grew 7.1 percent, with LLDPE up 6.1 percent. Regional sales of low density PE edged up 1.5 percent.
Top growth end markets for HDPE in the first half included retail bags, where sales were up 4.6 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.
PVC continued its slumber as well in July, with prices flat for the fourth consecutive month. For the year, prices are up a net of 1 cent per pound, with a 3-cent March increase eclipsing an earlier 2-cent decline.
First-half PVC sales grew 0.1 percent to 7.3 billion pounds. Among end markets, first-half sales into siding and related uses led the way with growth of 10.1 percent.
The 3-cent June increase for PET caught some buyers by surprise, while others were able to push some of it back into July. It was the third straight monthly hike for the material. Buyers who took the full three cents in June saw flat prices in July.
Some PET buyers had thought the string of hikes would stop at two months, as beverage firms filled their resin inventories in advance of high-demand summer months. For the year, North American PET prices are up a net of 6 cents per pound.
