Autumn leaves and PP fall in October

North American polypropylene prices in October continued their rollicking ride through 2016 with a decrease, while prices for PET bottle resin and PVC both rose.

Regional PP prices slid 1.5 cents per pound in October, following a similar price decrease in polymer-grade propylene feedstock. PP prices had soared a total of 9.5 cents per pound in August-September as inventories tightened. But those hikes came only after prices had fallen for five straight months — knocking a total of 10 cents off of PP prices — because of a big increase in availability of imported PP.

Taking into account prior increases and decreases, regional PP prices now are up a net of 2 cents per pound since Jan. 1.

Propylene prices are falling as inventories are trending up, according to Scott Newell, a market analyst with Resin Technology Inc. in Fort Worth, Texas. Supply/demand balances have improved for propylene monomer, he added.

North American PP sales were up 0.8 percent in the first nine months of 2016, according to the American Chemistry Council. Domestic sales essentially were flat for that period, while export sales surged almost 38 percent.

Although the overall domestic PP market was flat, some end markets did experience sales growth through September. In the sheet market, sales were up almost 5 percent. Domestic sales of PP into injection molded rigid packaging were up more than 2 percent.

Regional prices for PET bottle resin ticked up an average of 1 cent per pound in October, matching a similar increase in September. Higher feedstock prices played a role in the increase, as did temporary shutdowns of regional PET production because of Hurricane Matthew.

PET maker DAK Americas LLC operated under force majeure conditions at its plants in Fayetteville, N.C.; and Columbia and Charleston, S.C., from Oct. 10 until Nov. 1, a company spokesman said. Market sources added that rail deliveries of PET from the region also were affected by the storm.

Prior to the back-to-back 1-cent hikes, regional PET prices had slipped by 1 cent per pound in August. For the year, PET prices in the region now are up a net of 2 cents per pound. Regional PET sales are expected to be flat at best in 2016, as increased sales into bottled water struggle to offset ongoing drops in the carbonated soft drink market.

North American PVC resin prices jumped an average of 2 cents per pound in October, ending a streak of four consecutive months of flat pricing. Prices for the material hadn't moved since rising 2 cents per pound in June. Market sources said that the October increase resulted from improving inventories and higher feedstock prices.

Through September, U.S./Canadian PVC sales were up almost 5 percent, according to ACC, with domestic sales growth of almost 5 percent augmented by a similar surge in export sales. Sales of the material into its flagship rigid pipe and tubing sector were up more than 7 percent in that period.

The U.S. housing market is on track to record around 1.2 million housing starts this year, which would be up almost 10 percent from 2015. More than 60 percent of domestic PVC sales went into construction markets in the first nine months of 2016.

Regional prices for polyethylene and polystyrene resins were flat in October, which had to come as a relief to buyers. Selling prices for PE had jumped by a nickel in September after being flat for four straight months. PE supplies had tightened as a result of several planned maintenance turnarounds and unplanned outages in the region.

U.S./Canadian PE demand growth was mixed in the first nine months of 2016, according to ACC. Regional sales of high density PE were up more than 3 percent, while sales of linear low density PE grew almost 1 percent and those of low density PE declined more than 1 percent.

Domestic high density PE sales growth of 2 percent was boosted by export sales growth of almost 8 percent in the eight-month period. For linear low density PE, a domestic sales jump of more than 2 percent was lessened by a drop of more than 4 percent in the export market. The regional LDPE field saw domestic sales growth of more than 2 percent wiped out by a drop of 12 percent in export sales.

For solid PS, October prices were flat even as prices for benzene feedstock dipped by 20 cents per gallon. Market sources said that short-term production issues for PS prevented prices from following benzene in a downward direction. PS prices had climbed 3 cents in September, marking the second straight upward move for the material. The market had seen a 2-cent hike in August.

Regional PS prices are up a net of 6 cents per pound since Jan. 1. North American PS sales through September were down 0.4 percent compared to the same period in 2015, according to ACC. Sales of the material into food packaging and food service — its largest end market — were up almost 1 percent.