June was a relatively quiet month for North American commodity resin pricing, with only polypropylene and PET bottle resin seeing any changes.
Regional PP prices surged 8 cents per pound in June after moving up 7 cents in May. That followed a two-month period in March-April when prices slipped a total of 7 cents.
The 8-cent June jump for PP matched similar price hikes for polymer-grade propylene feedstock, meaning PP makers were unable to increase their profit margins for the month, according to David Barry, a market analyst with PetroChem Wire in Houston.
"The monomer price increase was driven by transient supply issues, which were magnified by the fact that ethane, which yields less propylene, is the favored cracker feedstock," Barry said.
"I think we're likely to see some giveback on propylene in the July-August period, but a lot will depend on whether the PDH [propylene] operators can maintain good rates," he added. "There are a number of wild cards in the outlook — trade policy, crude oil prices and hurricanes — but the prevailing sentiment among buyers is that PP prices have limited upside risk from here."
Larger exports of propylene out of North America also have impacted the PP resin market, according to Scott Newell, a market analyst with Resin Technology Inc. in Fort Worth, Texas.
"Propylene exports are moving out the door at a pace of 1.2 billion pounds," Newell said in an email. "Add to that several planned and unplanned outages this year [and] the ability to export propylene is leaving the U.S. without any supply cushion. Any supply disruption leaves the market vulnerable to further volatility."
Regional PP prices now are up a net of 11 cents per pound for the year. Total price volatility for the material — including all increase and decreases — has reached 40 cents per pound.
North American PP sales through May were up almost 2 percent vs. the same period in 2017, according to the American Chemistry Council. A domestic sales increase of just over 2 percent was dampened by a reduction of almost 15 percent for sales into the export market.