Commodity resin prices slam on the brakes in April

Early-year momentum for higher resin prices came to a stop in April, with North American commodity prices either down or flat.

The regional polypropylene market in April gave back 5.5 cents of the 20.5 cents it had gained in the first three months of the year.

Market sources said that lower PP prices were the result of lower prices for polymer-grade propylene (PGP) feedstock.

PGP supplies also are improving as some maintenance outages come to an end, they added. The wave of three price hikes that started the year also led PP users to pre-buy in advance of additional increases.

North American PP sales were up almost 1 percent in the first three months of 2017, according to the American Chemistry Council. Domestic sales essentially were flat in that period, but export sales surged 60 percent.

Among domestic end markets, three-month PP sales into injection molding grew 2.5 percent. That sector was led by a 5 percent gain for PP sales into consumer and institutional products, including furniture and housewares.

Regional polystyrene prices also tumbled in April, declining by an average of 5 cents per pound. That move took away most of a 6-cent increase the market had seen in March.

The March PS hike was the third consecutive one for that material. Those three increases had sent regional PS prices up a total of 19 cents per pound.

A major price drop for benzene, which is used to make styrene monomer, affected PS prices in April. Benzene prices fell 61 cents per gallon, a drop of about 18 percent. March was an unusual month in that PS prices rose even though benzene prices declined slightly.

PS maker Americas Styrenics of The Woodlands, Texas, already has announced a PS price decrease of 2 cents per pound for May. North American PS sales through March were down around 2 percent from the same period in 2016. Domestic PS sales were down just over 2 percent for those three months, while exports increased almost 6 percent.

North American prices for PET bottle resin joined the downward pricing convoy in April, declining an average of 2 cents per pound. That marks the second straight month that prices for that material have dropped, following a half-cent dip in March.

Paraxylene and purified terephthalic acid feedstocks have been under downward pricing pressure, sources said. Prior to March, regional PET prices had increased for six consecutive months, with those increases totaling 9.5 cents per pound.

Regional prices for both polyethylene and PVC were flat in April. PE makers first had planned to seek a 3-cent hike, but later moved that attempt back to May. A 6-cent increase originally planned for March had been reduced to 3, which was successful.

PE supply in March also was limited by production issues experienced by several resin makers, including Chevron Phillips Chemical Co. CP Chem on March 13 declared force majeure on high density PE because of a power outage at its plant in Orange, Texas.

The March hike was the second consecutive monthly increase for regional PE prices, following a 5-cent January hike. Prices had been flat in January, after falling an average of 2 cents per pound in December.

U.S./Canadian sales of low and linear low density PE showed solid growth in the first three months of 2017, with HDPE trailing behind. Three-month sales of LDPE were up almost 2 percent, with regional LLDPE sales through March up 3.5 percent. HDPE sales in the region slid by 3.5 percent.

For PVC, a 2-cent March hike was the second straight monthly increase for that material. Prices had risen 4 cents in February. Prior to that, prices had been flat since November.

Through March, U.S./Canadian PVC sales were up almost 2 percent. Domestic sales grew more than 3 percent, but were dampened somewhat by an export sales drop of 1.5 percent.

Further upstream, West Texas Intermediate crude oil prices began April at $51 per barrel but were near $49 when the month ended, for a decline of almost 4 percent. U.S. natural gas prices began April at $3.20 per million BTUs and moved as high as $3.40 during the month before returning to $3.20 by month's end.