Downward pricing trends continued in September for solid polystyrene and PET bottle resins in North America.
Solid PS prices plunged an average of 9 cents per pound, marking the second straight monthly decline for that material. Prices had slipped an average of 2 cents per pound in August, holding to a number that was pre-announced by PS makers Americas Styrenics and Styrolution.
The September PS price drop was more extreme, however, as the material followed benzene feedstock prices, which slipped 79 cents per gallon to finish September at $2.01 — a drop of about 28 percent.
October benzene prices are expected to be up slightly from that level, giving hope that regional PS prices can avoid a third straight monthly downturn. North American PS prices now are down a net of 13 cents per pound so far in 2015.
Much of the recent decline in benzene pricing is the result of increased imports, according to Phil Karig, managing director of the Mathelin Bay Associates LLC consulting firm in St. Louis.
"As buyers around the world for benzene derivatives such as polystyrene wait to see where polymer prices will bottom, there's a lot of short-term excess benzene that has to go somewhere," he said. "And the U.S. market is as good a place as any, especially for exporters in countries that have seen their currencies weaken against the U.S. dollar in the last year."
Through August, North American PS sales were down almost 1 percent vs. the same period in 2014, according to the American Chemistry Council in Washington. Most of that decline can be traced to the consumer and institutional end market, where eight-month sales fell almost 11 percent. Sales of PS into the market-leading food packaging/food service sector were up 1 percent for that same period.
North American prices for PET bottle resin slipped an average of 3 cents per pound in September, moving that material into negative pricing territory for the year. PET prices now are down a net of 1 cent per pound so far in 2015. The September move is the second straight monthly PET price drop, following a 4-cent downturn in August.
Seasonally, PET is moving into the part of the year where cooler temperatures lead to less consumption of carbonated soft drinks and bottled water, two major PET markets. PET makers continue to struggle with lower consumption of soft drinks in general, as consumers seek healthier alternatives. That can lead to bottled water growth, but that product has been impacted in recent years by thinner bottles that use less PET per unit.