Nylon 6 prices rise, bucking trend of dropping prices for other resins

Changes to demand and feedstock costs sent North American prices for several commodity resins lower in November. Meanwhile, feedstock tightness has sent regional prices for nylon 6 resins in the other direction since August.

Regional polypropylene prices took the biggest slide, declining by an average of 6 cents per pound. All grades of polyethylene in the region saw prices dip by 3 cents, while average selling prices for solid polystyrene and suspension PVC each were down an average of 2 cents per pound, according to market sources recently contacted by Plastics News.

PP prices settled downward for the second straight month after falling 1.5 cents per pound in October. Prices continue to fall as inventories of propylene monomer feedstock grow, sources said. Prior to these two price drops, prices had soared a total of 9.5 cents per pound in August-September as inventories tightened. Taking into account prior increases and decreases, regional PP prices now are down a net of 4 cents per pound since Jan. 1.

North American PP sales essentially were flat in the first 10 months of 2016, according to the American Chemistry Council. Domestic sales were down almost 2 percent for that period, while export sales surged almost 49 percent.

The 3-cent drop on all grades of high, low and linear low density PE was tied to lower prices for ethylene feedstock. The drop comes after prices were flat in October and in five of the previous six months overall. The only change in that period took place when prices jumped an average of 5 cents per pound in September. Sources attributed that move to an inventory correction connected to several maintenance turnarounds and unplanned outages.

U.S./Canadian PE demand growth was mixed in the first 10 months of 2016, according to ACC. Regional sales of HDPE were up almost 2 percent, while sales of LLDPE fell 0.5 percent and those of LDPE declined almost 3 percent.

Domestic HDPE sales growth of almost 1 percent was boosted by export sales growth of more than 4 percent in the 10-month period. For LLDPE, a domestic sales jump of almost 1 percent was lessened by a drop of almost 4 percent in the export market. The regional LDPE field saw domestic sales growth of more than 1 percent wiped out by a drop of 14 percent in export sales.

PVC makers in November essentially gave back a 2 cent increase they had won in October. As in PE, lower ethylene feedstock prices played a role. Prior to that October increase, prices had been flat for four consecutive months.

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

The downward 2-cent move on PS for November comes after prices were flat in October. Prices had climbed a total of 5 cents in August-September. Regional prices for benzene feedstock — used to make styrene monomer — were down almost 4 percent in November after falling almost 8 percent in October. Short-term production issues for PS in October had prevented prices from following benzene.

Regional PS prices are up a net of 4 cents per pound since Jan. 1. North American PS sales through October were down almost 1 percent compared to the same period in 2015, according to ACC. Sales into food packaging and food service — its largest end market — were up almost 1 percent.

North American nylon 6 resin prices have surged an average of 10 cents per pound since August, due in part to tightness of caprolactam feedstock. German plastics and chemicals giant BASF SE in September announced plans to remove more than 200 million pounds of annual caprolactam production in Europe by early 2018. This move already has caused some tightness in global markets for that material, sources said.

“Things have become bad and complicated in [nylon 6] pricing,” one industry contact added. “It's opened the door for European and Asian producers to sell into North America.”

2016 demand for nylon 6 in the North American automotive market has been good, but now “is tapering off a little,” the contact said, while demand in carpet fibers has been down.