Resin prices end 2016 with a whimper

North American commodity resin prices weakened as 2016 drew to a close, with prices for several materials falling in November.

Price drops for polyethylene, polypropylene, solid polystyrene and suspension PVC were tied into changes in demand and feedstock costs. Prices dropped even as regional oil prices jumped from $47 per barrel in early November to $51 by the end of the month. Oil prices typically affect commodity resins on a macro level.

A 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 six-month 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 the American Chemistry Council. 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.

Through October, the top domestic growth market for HDPE was blow molded household chemical bottles, where sales were up almost 9 percent to just over 1 billion pounds. For LDPE, non-food packaging film led the way in that 10-month period, growing almost 5 percent to more than 590 million pounds.

The top domestic growth markets for LLDPE for the 10 months were food packaging film, up 3 percent to almost 1.6 billion pounds, and shrink/stretch film, also up 3 percent to almost 1.4 billion pounds.

Regional PP prices took the biggest slide in November, declining by an average of 6 cents per pound. Prices for the material 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, regional PP prices had soared a total of 9.5 cents per pound in August-September as inventories tightened.

North American PP sales essentially were flat in the first 10 months of 2016, according to ACC. The material's top domestic growth market in those 10 months was sheet, where sales expanded almost 4 percent to almost 1.5 billion pounds.

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. PVC's flagship rigid pipe and tubing segment also was its largest domestic growth market for the 10 months, surging almost 7 percent to more than 4 billion pounds.

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.

North American PS sales through October were down almost 1 percent compared to the same period in 2015, according to ACC. Domestic PS demand growth was led by food packaging and food service — its largest end market — where 10-month sales were up almost 1 percent to more than 2.3 billion pounds.

Regional prices for PET bottle resin ticked up an average of 1 cent per pound again in November, matching similar increases in September and October. Higher feedstock prices played a role in the increase, as did the market's recovery from supply disruptions caused by Hurricane Matthew. PET maker DAK Americas LLC had limited production for most of October at its plants in Fayetteville, N.C.; and Columbia and Charleston, S.C.

Net price changes for 2016 through November show North American PVC prices up an average of 7 cents per pound, all grades of PE up 6 cents per pound and PS up 4 cents per pound. Regional PP prices through November have gone in the other direction, sliding by a net of 4 cents per pound. For the year, PET prices in the region now are up a net of 3 cents per pound.