North American selling prices for polypropylene resin took another big dive in March, as regional prices for solid polystyrene and PVC ticked up once again.
PP prices declined by an average of 6 cents per pound in March. Prices had fallen by a similar amount in February after jumping up 9 cents in January. Some 21 cents of combined price movement in three months is a lot for a commodity material, even one as volatile as PP.
The 6-cent March drop matched a similar price decline for polymer-grade propylene (PGP) feedstock. Supplies of both PP resin and propylene monomer have improved after a winter cold snap affected production in the Houston area. That cold snap led to the 9-cent January Jump.
Scott Newell, a PP market analyst with Resin Technology Inc. in Fort Worth, Texas, thinks the 6 cent March price drop will be "the last big decline" seen for a while. A major PP buyer in the Midwest told Plastics News that an April price reduction could be around 2 cents.
"Any PGP movement in April will be much more modest," Newell added. "The U.S. now has the lowest PGP price globally. That should help demand."
He also said North American PP demand has had seven straight months of below average demand, so March demand numbers "will show a decent pop."
The weak PP demand that Newell was referring to was seen in sales data for the first two months of 2018 from the American Chemistry Council. North American PP sales for that two-month period were down almost 4 percent vs. the same period in 2017. A domestic sales decline of almost 3 percent was worsened by a plunge of almost 28 percent for sales into the export market.
Prior to the February slide, North American PP prices had increased for seven consecutive months, with those increases totaling 19.5 cents per pound. Higher domestic demand combined with supply outages had played a role in these price hikes.