PE, PP, PET and recycled prices bounce around in January

North American prices for polyethylene, polypropylene and PET bottle resin hit the ground running in 2018.

Prices for PP and PET both moved up in January, while PE prices ticked down an average of 3 cents per pound. The PP hike totaled 9 cents, while the upward move for PET was 3 cents.

The PP surge mainly resulted from tightness in propylene monomer feedstock and, in some cases, for PP resin itself. North American PP prices now have increased for seven consecutive months, with those increases totaling 19.5 cents per pound. Higher domestic demand combined with feedstock and resin shortages from Hurricane Harvey have played a role in these price hikes.

The January price hike was tied to unusually cold weather in the Houston area, where large amounts of capacity for PP resin and feedstock are located. A PP line operated by Braskem Americas in La Porte, Texas, had an unplanned shutdown on Jan. 17 because of a frozen boiler transmitter.

Another PP line operated by LyondellBasell Industries in Bayport, Texas, also was down on that same date because of a power issue. Minor production issues were reported at ethylene or propylene units operated in the region by Flint Hills Resources, Huntsman Corp., Chevron Phillips Chemical Co. and Enterprise Products.

Temperatures dipped into the 20s, creating icy conditions and leading to some power outages. The cold snap marked the first time that Houston had seen temperatures in the 20s in January since 1996.

The 9-cent increase “almost entirely was cost push,” according to Scott Newell, a market analyst with Resin Technology Inc. in Fort Worth, Texas. “It was all driven by polymer-grade propylene. There was no [profit] margin expansion.” Improved operating conditions could lead to some of the 9 cents coming off in February, he added.

A major PP buyer on the U.S. East Coast said that supplies were tight and that his injection molding firm was “having a hard time” in sourcing rail cars of resin. The firm has been able to meet its needs, he said, but now faces a challenge in passing the increase on to its own customers.

North American PP sales essentially were flat in 2017, with domestic growth of almost 3 percent negated by a drop of more than 50 percent in export sales, according to the American Chemistry Council.

PET bottle resin prices advanced an average of 3 cents per pound in January, as supplies remained a bit tight in the wake of M&G Polymers' bankruptcy-related shutdown of its 800 million-pound-capacity plant in Apple Grove, W.Va.

That plant now has been purchased by Asian PET-maker Far East New Century Corp. of Taiwan and is expected to restart, which would improve supplies for the regional market. PET prices now have increased for eight straight months, with most customers seeing 11 cents in increases since September.

The average PE price decrease for January was 3 cents per pound, due in part to lower demand. Prices for those materials had been flat in November and December. Prior to that two-month period, prices had climbed a total of 7 cents per pound between May and October.

January's 3-cent decline was tied into lower demand and came after there was some confusion between actual market price declines and nonmarket adjustments received by some buyers, according to RTI market analyst Mike Burns.

U.S./Canadian PE sales were mixed in 2017. Sales of high and low density PE both were down for the year. HDPE in the region saw sales slump almost 4 percent, as domestic sales growth of almost 4 percent was overcome by a drop of almost 28 percent in exports.

For LDPE, sales dipped almost 1 percent, but for opposite reasons than HDPE. Domestic sales of LDPE slipped more than 2 percent, but the overall loss was softened by a gain of more than 4 percent in export sales.

The U.S./Canadian LLDPE market fared better in 2017, with sales growth of more than 1 percent. Domestic sales growth of almost 4 percent was weakened by a drop of more than 6 percent in exports.

North American PE-makers now are seeking price increases of 4 cents per pound effective Feb. 1.

Regional prices for PVC and solid polystyrene resins both were flat in January. PVC had dropped 1 cent in December after flat pricing in November. That decline was the first seen in regional prices since November 2016. PVC prices had moved up 3 cents in October after six straight months of flat pricing.

PVC demand has benefited from a strong U.S. construction market. U.S./Canadian PVC sales managed growth of just over 3 percent in 2017. Domestic sales growth of almost 5 percent was weakened by flat export sales.

Regional PS prices had jumped 5 cents in December after being flat in November. That hike was spurred by benzene feedstock prices, which jumped 46 cents to $3.30 per gallon, a one-month jump of 16 percent. Prior to November, PS prices had increased by 3 cents in both September and October, meaning prices surged 10 cents per pound in the final four months of 2017.

North American PS sales fell just over 2 percent in 2017. A domestic sales loss of more than 2 percent was softened by a gain of 5.5 percent in exports.

Plastics News also recently reported higher North American prices for several recycled resins. Prices have increased since October as a result of increased use of the materials to meet sustainability requirements, according to market sources.

Prices for clear recycled PET pellets and flake are up an average of 4 cents per pound in that period. Average prices for all grades of recycled polystyrene also are up 4 cents per pound.

Prices for all grades of recycled high, low and linear low density polyethylene have ticked up 5 cents per pound as well. The PetroChem Wire consulting firm said that some buyers of recycled HDPE recently agreed to meet higher offers to meet urgent spot needs.

At the macro feedstock level, West Texas Intermediate crude oil prices surged almost 9 percent in January to finish near $65.75 per barrel. U.S. natural gas prices slipped about 2 percent for the month, closing near $2.90 per million British thermal units.