All quiet on the resin front, except for PET

North American commodity resin prices were surprisingly quiet in October, with only PET bottle resin showing any movement.

Time will tell if this was the calm before a pricing storm.

Regional PET bottle resin prices declined by an average of 1 cent per pound for the month, ending a streak of two consecutive monthly price hikes. Prices had jumped 6 cents per pound in September after a 2-cent hike in August.

Market watchers cited improving supplies of purified terephthalic acid and other raw materials as reasons for the October decline. Sources added that buyers may see more price declines for PET in November. Demand for bottle resin typically declines in the fall and winter months, the result of declining sales of bottled water and carbonated soft drinks.

Longer term, sources said that the U.S. International Trade Commission's decision not to place antidumping duties on PET resin imported into the United States from Brazil, Indonesia, South Korea, Pakistan and Taiwan could increase the volume of lower-priced PET. ITC's decision came even though the U.S. Department of Commerce previously had determined that PET from those countries are sold in the United States at less than fair value.

Prices for all other North American commodity resins were flat for the month. All grades of polyethylene had moved up by an average of 3 cents per pound in September, with ethane feedstock cited as the big driver for that hike.

The September PE increase followed a chaotic pricing month in August, which ended with 3-cent-per-pound reductions for most grades of low and linear low density PE and for film and other flexible grades of high density PE.

Backed by new production capacity, export sales of PE had fueled U.S. and Canadian PE growth in the first nine months of 2018, according to the American Chemistry Council. Exports of LLDPE in particular had exploded, growing almost 94 percent vs. the same period in 2017.

LLDPE exports, combined with domestic demand growth of more than 4 percent, lifted total regional LLDPE market growth to more than 23 percent for the period.

HDPE exports from the region were up an impressive 36 percent for the nine months. Those levels and domestic growth of more than 8 percent created nine-month HDPE growth of more than 13 percent. Growth in LDPE exports was more modest at 15 percent. That growth helped the regional LDPE market overcome a loss of almost 1 percent in domestic sales for overall LDPE growth of more than 3 percent.

Regional solid polystyrene prices had bumped up an average of 2 cents per pound in September after being flat in August. October prices for benzene slipped down by 13 cents per gallon — about 5 percent — to $2.85, but that wasn't enough to move prices for PS resin, which was flat for the month.

North American solid PS sales have struggled so far in 2018, dropping more than 4 percent through September. Exports have provided a bright spot, growing 20 percent and somewhat reducing the impact of a 5 percent drop in domestic sales.

Polypropylene was the only major commodity resin that experienced lower prices in September. Average selling prices for the material were down 1 cent per pound, giving back half of a 2-cent hike that the market had seen in August.

Resin prices for PP in September again followed the path of propylene monomer feedstock. Prices had been flat in July after surging a combined 15 cents in May-June.

North American PP sales were down almost 1 percent through September, although market watchers said domestic consumption of the material actually may have increased because of a surge in the amount of PP imported into the region. Based on ACC totals, flat domestic PP sales were made worse by a decline of almost 33 percent in export sales.

Some domestic PP end markets have fared well in spite of the overall decline. Sales of PP into oriented film were up almost 14 percent for the nine-month period. Sales of the materials into injection molded caps and closures grew 6 percent.

Regional solid PVC prices were flat for the seventh consecutive month in October. Some buyers had expected an increase for the month, but it never came. A small fire in early October at a Westlake Chemical plant making PVC feedstock VCM in Plaquemine, La., didn't have much impact on the PVC resin market.

U.S./Canadian PVC sales were strong through September, climbing just over 5 percent vs. the same period last year. Domestic growth of 1 percent was bolstered by a jump of almost 15 percent in export sales. Among end markets, extruded windows and doors showed explosive nine-month growth of more than 26 percent. That segment accounted for almost 7 percent of all domestic PVC sales during that period.

At the macro-feedstock level, West Texas Intermediate crude oil prices began October at $75 per barrel but had slid down to $64 by the end of the month, a dip of almost 15 percent. Regional prices for natural gas rose from $3.20 per million British thermal units to $3.25 in the same comparison, for an increase of almost 2 percent.