North American selling prices for most commodity resins increased again in October, but market watchers agreed that these hikes could have been worse in the wake of Hurricane Harvey.
Prices for polyethylene, suspension PVC and solid polystyrene resins all moved up 3 cents per pound during the month, with regional prices for polypropylene ticking up by 1 cent as well.
These hikes were caused by higher raw material prices and by some lingering supply and shipping disruptions from Hurricane Harvey, which hit the Texas coast in late August. Most resin production has recovered, although some lingering issues with truck and rail transport still remain.
The PE increase came after prices jumped a total of 7 cents in September and October. Because of varied implementation dates, some buyers may not see the additional 3 cents until Nov. 15, market sources said.
Tight PE supplies in the post-hurricane PE market have helped price increases take hold. Chevron Phillips Chemical's Cedar Bayou plant in Baytown, Texas, remained out of production for most of the month but has since restarted.
U.S./Canadian PE sales were mixed in the first nine months of 2017, according to the American Chemistry Council. Sales of high density PE were down 5 percent, as a domestic sales gain of more than 1 percent was wiped out by a drop of almost 27 percent in exports.
Low density PE sales ticked up almost 2 percent in those nine months, with a domestic sales drop of 1.5 percent negated by an export sales gain of 12 percent. In linear low density PE, regional sales were flat, as domestic growth of almost 3 percent was lowered by an 8 percent drop in exports.
The 3-cent PS hike for October marked the second consecutive month that prices had climbed by that amount. Some production of benzene, which is used to make styrene monomer, had been affected by Harvey.
North American PS sales fell more than 1 percent in the first nine months of 2017. A domestic sales loss of almost 2 percent was softened a bit by a boost of almost 8 percent in exports.
After being flat for six consecutive months, PVC prices moved up 3 cents in October, as suppliers were able to get most of a 5-cent hike they'd been seeking. Market sources said lower export prices prevented the full 5 cents from taking hold. The regional PVC market continues to work through some post-storm supply issues.
U.S./Canadian PVC sales managed growth of almost 2 percent in the first nine months of 2017. Domestic sales growth of almost 4 percent was weakened by an export sales loss of 3 percent.
In PP, the 1-cent hike was tied to higher prices for polymer-grade propylene (PGP) feedstock, but it was less than some market watchers had expected in the wake of the storm. Regional PP prices had jumped 7 cents in September, as PGP was in very short supply because of storm-related production issues.
North American PP sales essentially were flat in the first nine months of 2017. Domestic sales grew more than 1 percent, while exports slipped almost 30 percent.
Regional PET bottle resin prices were flat in October after moving up an average of 4 cents per pound in September, as markets worked to recover from the storm. That calm could be disrupted in November, however, as the market tightens after financial troubles led M&G USA to stop production at plants in West Virginia and Mexico.
Price increases ranging from 2.5 cents to 6.5 cents were reported for October. Prices for PET also moved up 2.5 cents in August and now have increased for four consecutive months.
Both M&G and its corporate parent, Mossi Ghisolfi Group of Italy, have filed for bankruptcy, due in part to cost overruns on its Project Jumbo PET site in Corpus Christi, Texas. That plant, which is less than 85 percent complete, was expected to add more than 2 billion pounds of capacity to the market later this year.
In broader feedstocks, West Texas Intermediate crude oil began October around $51 per barrel but ended near $54.50 for an increase of almost 7 percent. Regional natural gas prices were around $3.10 at the start of the month, but they had fallen to near $2.90 by the end of October for a decline of more than 6 percent.