July sees PP and PET prices up, PS down

Three of five major commodity resins were on the move in North America in July. The other two took the month off.

Price increases were recorded by polypropylene and PET bottle resin, with polystyrene prices falling. Standing still were polyethylene and PVC.

Regional PP prices inched up an average of 0.5 cents per pound, according to buyers contacted by Plastics News. Prices for that material had been flat in June after sliding down 7.5 cents in May and 6 cents in April.

That two-month, 13.5-cent downturn came after prices rose an average of 20.5 cents in the first three months of the year. Looking ahead, regional PP prices in the second half of the year should be more stable than they were in the first half, according to Scott Newell, a PP market analyst with Resin Technology Inc. in Fort Worth, Texas.

"Polymer-grade propylene [monomer] was all over the place in the first half, and that had an effect on pricing," Newell said in a phone interview. "Demand is doing OK, but that's been volatile as well."

North American PP sales weren't strong in the first half of 2017, increasing almost 1 percent vs. the same period in 2016. Domestic PP sales grew 1.3 percent in that period, while export sales slipped almost 11 percent.

Regional PP makers now are working on a 3-cent increase attempt effective Aug. 1, but Newell said there's a chance that move could be pushed back to September.

The PET increase for July was 1.5 cents and was the result of tighter supplies and slightly higher feedstock costs, according to market watchers contacted by Plastics News. Some buyers reported variations of different amounts between 1 and 2 cents.

The July increase is the second consecutive monthly hike for PET, which had ticked up 0.5 cents per pound in June. That June hike ended a streak of three straight monthly declines totaling 3.5 cents per pound for the material.

PS prices in North America tumbled by an average of 4 cents in July after being flat in June. Various buyers reported July declines ranging from 2 to 5 cents, but the 4-cent drop was seen by the largest number of buyers.

The July dip marks the third time in four months that regional PS prices have declined. Prices for the material had slid 2 cents in May and 5 cents in April. Prior to those declines, prices had increased by 6 cents in March.

The July PS slide was tied in to a 20-cent drop in price for benzene feedstock, which is used to make styrene monomer. North American benzene settled at $2.51 per gallon for the month. Market prices for both benzene and PS resin have been volatile so far in 2017.

"Benzene went crazy this year," RTI PS market analyst Robin Chesshier said. "There were refinery changeovers and more exports, and [PS] resin makers jumped all over it. But buyers naturally stopped buying when they thought prices were going to go higher, so prices swung back down."

Even with the recent price drops, North American PS prices are relatively high, Chesshier said, leading to increased competition from PP and PET resins and to higher interest in PS imported from South America and Asia.

North American PS sales fell 1.5 percent in the first half of 2017. A domestic sales loss of 1.6 percent was softened a bit by a gain of more than 3 percent in export sales.

PS maker Americas Styrenics now is attempting to raise prices by 2 cents per pound effective Aug. 1.

Prices for all grades of high density, low density and linear low density PE were flat for the second straight month in July. Regional PE prices had dropped 3 cents per pound in May. That move wiped out a 3-cent hike that had taken hold in March. First-half U.S./Canadian PE sales were mixed, according to the American Chemistry Council.

Sales of high density PE in the region were down 3 percent in the first half of the year, as a domestic sales gain of almost 4 percent was wiped out by a drop of 25 percent in export sales. Low density PE sales in the region ticked up 1 percent in that period, with a domestic sales drop of 1 percent negated by an export sales gain of almost 8 percent.

In linear LDPE, regional sales grew almost 2 percent, as domestic growth of almost 4 percent was lowered by a 6 percent drop in export sales.

Regional PVC prices in June were flat for the fourth consecutive month. This flat spell has followed a two-month stretch in which prices increased a total of 6 cents per pound.

First-half U.S./Canadian PVC sales were up almost 1 percent. Domestic sales grew almost 4 percent but were eclipsed by an export sales drop of nearly 6 percent.

In PE and PVC feedstocks, West Texas Intermediate crude oil prices began July at $46.80 per barrel and ended the month around $49.25, for an increase of 5 percent. Regional prices for natural gas — used as a feedstock in most North American PE and PVC — started the month at $2.95 per million BTUs but were at $2.80 by the end of the month, for a decline of 5 percent.